The PlayUp US business is potentially up for sale after its Australian parent company launched a strategic review of the business last week.
The PlayUp board announced the review last week, which could lead to:
- Strategic partnerships
- A sale of the company
- ‘Other transactions’
PlayUp US on the block
The process could include the sale of the US business, PlayUp US CMO Kevin Smith confirmed.
“We’ve got all kinds of opportunities available and a ton of future value in the business,” Smith told LSR. “So it makes sense for us to evaluate all those options.”
Strong US footprint
PlayUp has eight US market access deals in place and several more in the pipeline, Smith said.
The operator’s sportsbook is live in Colorado and New Jersey, and its racebook is live in 24 states.
Tech migration ahead for PlayUp
PlayUp is also in the process of getting its own technology platform GLI-certified in the US. PlayUp will then migrate the US business from its current Amelco platform to the proprietary tech stack.
Smith would not commit to a timeline but said it was “months rather than years”. Ohio could be the first place where the new platform would launch, some time after the market goes live in January 2023.
PlayUp has a licensing deal in the state with local casino operator JACK.
Controlling your own destiny
Smith said: “The big priority is having our own tech powering the book. We have a team of developers in house working on this. But we want to make sure we do this the right way. We want to do it it as quickly as possible but it’s important to get it right.”
The PlayUp Australia business already runs on the proprietary platform, which covers the trading engine and the player account management platform (PAM). But it needs to be ‘Americanized’ and made compliance-ready for the US, Smith said.
Following the migration, players would benefit from a single wallet and account across multiple states for PlayUp’s sportsbook, racebook and online casino.
In-house tech for the win
Smith said: “We know owning technology is what moves the needle in the long term.
“Any operator in the US will tell you, if it is an outsourced platform, it is not a perfect solution. Every system has issues. So when you talk long-term, you want to be as nimble as possible in making enhancements and improvements.”
Smith acknowledged the proprietary tech stack could also boost the asking price for PlayUp’s US business. However, any deal will come in significantly lower than the $450 million price tag provisionally agreed with crypto exchange FTX last year.
That deal ultimately fell apart, resulting in a lawsuit between PlayUp and its former US chief Dr. Laila Mintas over who was to blame.
Court update on Mintas vs PlayUp
A judge issued an update on that case this week, confirming a prior decision that PlayUp could not get a restraining order against Mintas.
The district court said it appeared “more likely” that Mintas had “properly exercised her executive responsibility and that she was turned into the scapegoat” for the failed deal.
The court said there was “substantial evidence” her comments were not the reason the FTX acquisition failed.
Mintas is now suing PlayUp for damages, and that case may have to be settled before any sale of PlayUp’s US business can go through.
Potential acquirers, though, will have to ask the question: if Mintas was not to blame for the failed deal, who was?