PlayUp Reportedly Close to Selling US Unit to Public Company

Posted on: July 12, 2023, 02:08h. 

Last updated on: July 13, 2023, 01:20h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Australia-based PlayUp is close to selling its US operations to an unidentified public company, and will embark upon a significant restructuring, including sizable layoffs.

PlayUp
The PlayUp logo. CEO Daniel Simic said the company is close to selling its US operations. (Image PlayUp)

Legal Sports Report’s Matthew Waters broke the news on Wednesday, citing PlayUp CEO Daniel Simic. As was the case with PointsBet’s (OTC: PBTHF) recently announced sale of its US business, PlayUp’s Australian operations won’t be affected by the upcoming transaction.

Simic didn’t mention a sale price for PlayUp’s US unit in the interview. But he noted it’s likely that just seven staffers will make the transition to the acquiring firm. The operator had 38 US employees six months ago, but that number declined to 18 as of June 30, according to Legal Sports Report. PlayUp offers online sports betting in Colorado and New Jersey.

Simic added that the deal was originally scheduled to close at the end of the second quarter, and that he believes it will be concluded at some point in July.

End of Long Saga for PlayUP in US

Should PlayUp consummate a deal to sell its US operations, it would mark the end of a soap opera-esque saga for the gaming company in this country.

In early 2022, the company landed $35 million in funding from now-defunct cryptocurrency exchange operator FTX. There was talk that FTX was mulling a $450 million acquisition of PlayUp — a deal that supposedly collapsed because then-CEO Dr. Laila Mintas wouldn’t stay on with the firm following the acquisition. PlayUp later filed litigation in federal court against Mintas, alleging she bashed her former employer to FTX.

FTX ultimately collapsed last November amid allegations that CEO Sam Bankman-Fried and others defrauded investors, sparking liquidity and solvency concerns that were eventually proven accurate.

Last September, PlayUp announced plans to go public via a reverse merger with IG Acquisition Corp., a special purpose acquisition company (SPAC) controlled by Bradley Tusk. That deal fell apart in January after IG Acquisition claimed PlayUp failed to provide material financial documents in the previous month. The offer valued the gaming company at $350 million.

What Buyer Gets with PlayUp US

As Simic acknowledged to Legal Sports Report, in the US, PlayUp isn’t DraftKings or FanDuel. But he believes the company can add value for its suitor because of its established competencies in the wagering industry,

As for what the unidentified buyer is getting with PlayUp’s US operations, there are the aforementioned Colorado and New Jersey sports wagering operations, as well as market access agreements in Indiana, Iowa, and Pennsylvania. Additionally, the gaming company holds internet casino rights in Iowa, New Jersey, and Pennsylvania.

In April, PlayUp settled a case with the Ohio Casino Control Commission (OCCC), paying a $120K penalty while agreeing to not apply for a gaming license in that state for four years.