Late last week, the technology supplier PlayUp Ltd. filed another motion against their former U.S. CEO Dr. Laila Mintas.
It’s the latest filing in a legal battle that PlayUp initiated last November. That’s when the Australia-based global online sports betting operator asked for a temporary restraining order against Mintas. PlayUp claims that Mintas intentionally derailed a $450 million takeover bid by FTX, a cryptocurrency exchange headquartered in the Bahamas.
PlayUp claimed that Mintas badmouthed PlayUp to FTX in violation of her employment agreement. It also says that Mintas’ actions constituted a “breach of the implied covenant of good faith and fair dealing, breach of fiduciary duty, and violation of Nevada Trade Secrets.”
All of this happens as PlayUp waits to make its real money online casino debut in the US. It already operates a regulated sportsbook in two states, plus an unregulated product called Slots+ which exploits the same legal loophole as land-based historical horse racing (HHR) machines.
New wrinkles in the story keep coming up at a pace that makes it difficult to follow. Here at Bonus we’ve done a deep dive on this story to help you make sense of it all.
Mixed Results in Court
Last December, a Nevada federal judge granted PlayUp the temporary restraining order it had sought against Dr. Mintas. PlayUp had told the court that Mintas scuttled the potential takeover in retaliation for not getting the new contract she’d been seeking.
The company claims she’d been demanding too much. According to their lawsuit: Mintas wanted her compensation doubled, $500,000 to $1 million per year. She also wanted to have her stake in the company increased from 10% to 15%.
This past January, however, federal judge Gloria Navarro denied the company’s motion for a preliminary injunction. An appeals court later upheld that decision.
In her ruling, Navarro stated that:
The defendant provides substantial evidence in her response to the preliminary injunction that her comments did not cause the sale to fail; and plaintiffs did not otherwise provide evidence that the defendant even likely made a disparaging comment to FTX. It was just as likely or more likely that the actions of Daniel Simic are the ones that caused the negotiations to cease irreparably.
Daniel Simic is the global CEO of PlayUp Ltd. He co-founded the company in Australia in 2016 with Michael Costa.
Mintas subsequently filed a counterclaim against PlayUp. She claims that PlayUp had defamed her and brought on “intentional infliction of emotional distress.”
An Ugly Battle Turns Uglier
In June, a different federal judge in Nevada shot down Mintas’ motion to compel PlayUp to expedite the discovery process of evidence in the case.
More pointedly, Judge Nancy J. Koppe went out of her way to issue both sides a warning:
Although the Court has already done so, it again reminds both sides that they need to be civil and cooperative with one another… Counsel must put aside their rancor to focus on the needs of the case. To the extent they cannot do so, they will face consequences for that shortcoming.
It was after this, in July, that the US Ninth Circuit Court of Appeals upheld Judge Nararro’s decision to deny PlayUp an injunction. Then, on Aug 8, PlayUp made its latest filing. (Bonus was already working on this story by that point and obtained a copy of the filing from PlayUp’s legal team.)
In the document, PlayUp’s attorneys Michael Popok and Amanda Brookhyser raise issues of what they say are discovery abuse, spoliation of documents, and misrepresentations by Mintas under oath related to discovery. Mintas and her lawyer, Jennifer Braster, have until Aug 20 to respond.
Popok told Bonus that he expects the case could drag into 2024 before the dust settles. In the meantime, understanding how things went so wrong between Dr. Mintas and PlayUp requires us to go all the way back to the beginning.
Dr. Mintas Joins PlayUp to Lead Its US Expansion
PlayUp Ltd. is an Australian public company based in Zetland, New South Wales, Australia. Its portfolio includes phone applications for sports betting and online slots. As mentioned, its US offerings at the moment are limited to a sportsbook in New Jersey and Colorado, and a slots app, powered by parimutuel racing data. PlayUp says the latter is legal in 25 states, though it’s important to note that it is not regulated by any state gaming commission.
In 2019, Simic hired Mintas to lead its US operations. She was one year out from being given a Leaders in Sports U 40 Award, an SBJ Game Changers Award, and an International Award for Women in the Gaming Industry—Inspiration of the Year. The same year, Global Gaming Business’ GGB Magazine named her one of 25 Executives to Watch in 2019.
Despite all those accolades, though, PlayUp was her first time in a CEO role. Simic tasked her with growing the company’s footprint in the US, and she did quite well in that regard. (For the first year-and-a-half, she did it all from home.)
She also became an investor in the company. According to Mintas, during her two-year tenure with PlayUp, she put “seven figures of her own money into the company.” She has also claims that the company’s value increased from $50 million before she came on board to almost $300 million by fall 2021.
PlayUp’s Big Ambitions
There was a lot going on with PlayUp during Mintas’s time as CEO. For one thing, it had started working on the development of its own proprietary technology platform and getting it certified by Gaming Labs International for use in the US. PlayUp Australia had been using its own proprietary platform for a while. Establishing one for its US operations began around the time Mintas came onboard.
Mintas also had a hand in the development of PlayUp Slots+, the parimutuel-driven slots app. On the regulated gambling front, she helped PlayUp attain full operational licensure from the New Jersey Division of Gaming Enforcement last October.
Right after PlayUp U.S. won its New Jersey licensure, SBC Americas quoted Mintas, still enthusiastic about the company’s prospects at the time:
This is a huge milestone for our business. . . . We have aggressive growth plans for our jurisdictional footprint in 2022 and going into other states with New Jersey approval in our back pocket is a positive sign for other regulators.
The US is a tough market for small, independent operators, however. One of PlayUp’s ambitions has been to make itself an acquisition target. As it was pursuing its licenses in New Jersey and Colorado, it got its first nibble.
Potential Sale to FTX
In July 2021, the cryptocurrency exchange FTX expressed interest in buying PlayUp for $450 million.
By Mintas’s account, FTX reached out to her the following month. She says that they told her they were interested in only acquiring PlayUp Inc. – that is, the US wing of the company, led by Mintas. She says that FTX’s advisor, Chris Grove, informed her that FTX saw her as the “jewel of the company.”
FTX, Mintas claims, wanted her to stay on for at least 24 months following the acquisition. (Note: Grove led Catena Media’s US division until 2019, though he had departed before the company acquired Bonus.)
It was here that Mintas and the company’s Australian leadership began to diverge.
According to a brief filed by PlayUp attorneys Popok and Brookheyser, Simic and FTX representatives agreed to a term sheet to advance their negotiations. As part of that term sheet, FTX deposited $45 million into PlayUp Ltd.’s accounts. All of this happened about 3 months before Mintas’s employment agreement was set to expire.
Mintas did not participate in the negotiation of that term sheet. She says she only found out about it after the fact and was disturbed by certain aspects of the deal.
Mintas Raises Objections
Mintas says that Simic laid out the terms of the FTX deal to her in an email sent on Nov 9, 2021. He’d included the sale of a separate company called PlayChip for $105 million. There was also a $65 million payment for “key” Australian staff. Simic himself was set to receive $25 million of this.
Mintas says she had never heard of PlayChip. She later found out that it was controlled by the same men who make up the board of PlayUp: Simic, Michael Costa, and Richard Sapsford.
Mintas had concerns about these add-ons. She says she explained her objections to Simic: Firstly, she felt they harmed PlayUp’s shareholders by diverting money from the sale. Secondly, it looked as if Simic was putting his personal interests above those of the company.
At this point, Mintas claims that Simic and the other board members began working to remove her from the negotiations and from the company. This happened while she was in the midst of negotiating a new contract for herself.
Ultimately, the FTX deal failed, which provoked PlayUp’s legal action against Mintas. Depending on who you ask, the failure of the deal was either because of the actions of Simic and the board, or because of Mintas’s response to that.
Underlying the case is the deteriorating internal situation at PlayUp during Mintas’s tenure. It’s that souring relationship between her and the Australian board – as well as the specifics of Mintas’s concerns – that we’ll examine in the second part of this deep dive.
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