PlayUp CEO Daniel Simic asked Colorado sports betting regulators to put the state’s sportsbook into maintenance mode, he told Legal Sports Report late Thursday night.
The request comes about 24 hours after Simic informed his team the New Jersey site had to shut down. That news came by letter from Division of Gaming Enforcement Director David Rebuck on Wednesday, who told Simic he revoked PlayUp licenses in New Jersey.
Asked to clarify ‘maintenance mode,’ Simic responded, “no deposits or bets. We plan on releasing a new platform whereby we will relaunch in NJ and CO at the same time. With NJ, we simply have to resolve the issues at hand which we are working through now and reapply for a transactional waiver. As for CO, we requested permission to go into maintenance mode, but will relaunch at same time. (It’s) not cost efficient to run one state on its own.”
Colorado investigating PlayUp
LSR reviewed multiple screenshots from a former PlayUp executive that suggest an ongoing issue with payroll taxes being paid. Rebuck’s letter from the DGE highlighted their inability to get information on similar financial files.
One screenshot included an email from the Colorado Department of Revenue sent on June 29:
“We are following up on information we received and are requesting the following documents for the past 6 months (January 1, 2023 to current – June 2023):
- Accounts payable ledger
- All tax remittances for Colorado, New Jersey and US Federal Government
- Bank account statements for the accounts used for payroll and tax expenses
- List of US employees
- Paystubs for all US employees showing W-2 information and state tax withholdings.
“We require these documents by COB July 5, 2023.”
Simic acknowledged discussing tax information with Colorado representatives in a text Thursday evening. He said he sent reports from an external accounting service to complete it because “we don’t have a US finance function anymore.”
CO sends second request for PlayUp details
A spokesperson for the Colorado Department of Revenue would not confirm the investigations:
“The Department never comments on any pending or active investigations. This is not a confirmation of an investigation.”
The requested information apparently was not received. Another email from a Colorado Department of Revenue employee sent on July 10 asked about a different contact to “resolve questions about the tax returns” since there had been “a lot of staff turnover recently.”
Former CFO also asked for tax details
Another screenshot of an undated email from former Global CFO Glenn MacPherson to finance employees touched on the payroll tax issue as well:
“1. Please check your records and confirm that there was no such tax payments or lodgements for the above pay runs and also confirm there are no other missing taxes for pays you have run for us, and
“2. File any missing tax lodgements (forms etc) today and then advise us the amounts to pay so we can contact the tax offices and explain and pay directly.”
One source said the way they were paid changed in March:
“In March we started getting paid by a different account with no paystub or knowing tax or benefit withholdings. To the day we were let go [no] one knows what their paystub or taxes look like for the last 3 or so months. Who knows what our W-2 will look like. Nothing was ever contacted to us about possible sale or possible termination.”
Simic addresses ‘major’ DGE issues
Back in New Jersey, there are multiple major issues to satisfy for New Jersey’s regulator, Simic told LSR.
- The first is the payroll tax reconciliation: “In the absence of having no finance staff in the US we have provided what we can and have an external accountancy agencies completing anything that is not complete in our systems, which appears to be be from March onwards. All tax lodgements have been paid,” Simic said to LSR.
- The second, an outstanding payment, is a “relatively small” amount, he said.
- The third issue of reduced headcount is based on the plan to sell the US business, Simic said. “We currently don’t have a responsible manager based in NJ at present and without that, you cannot operate.”
- Last, Rebuck mentioned a pending investigation concerning a potential fraud charge that had not been finalized. That situation was finalized and closed “with the patron and with the DGE [Friday],” Simic said.
Have NJ withdrawals started?
The only function PlayUp can perform in New Jersey is paying out customers. A former PlayUp executive told LSR that there were 30 customers with withdrawal requests of nearly $174,000 that were unpaid as of June 25.
Simic also shared a screenshot with LSR that he said showed 13 payouts were made to PlayUp customers. The screenshot showed the payouts came at some point Friday morning in Australia with word “Payout” and no further detail confirming to whom they were made or for what amount, though.
Also unpaid are multiple PlayUp employees that have not been paid since at least June 15 with some missing paychecks from before that.
