According to Legal Sports Report (LSR), PlayUp’s foray into the American market may prove to have been short-lived, as CEO Daniel Simic says the company expects to sell its US assets to an unspecified company. Simic told LSR that the buyer is a publicly-traded entity with sufficient senior management staff to run a sports betting operation in the competitive US market. In the process, it will trim its workforce to just seven employees.
Since 2020, reality has set in for sports betting operators just as quickly as the hype built in the years before. Revenue hasn’t matched expectations while marketing battles have proven costly. Many smaller brands like Fubo and MaximBet have exited the space entirely. Some larger ones, like Unibet and Bally’s, have elected to focus their attention on the more lucrative online casino vertical even though it is only legal in a handful of states.
Simic told LSR that he’d like for PlayUp US to avoid having to shut down. However, with many of its North American plans having fallen through, there is no money to continue pressing on in an unprofitable market. Selling off that part of the company may be the best available compromise.
The remainder of the business will continue operating in Australia as usual.
(Note: LSR and Bonus are both part of the Catena Media network.)
An Unfortunate Series of Events
PlayUp applied to operate an online casino in New Jersey. Plus, it did launch sports betting there and in Colorado. However, almost nothing has gone right for the company since it decided to try its luck in the US.
First, there was the failed deal with the cryptocurrency exchange FTX, which was expected to buy the company and fund its US market entry. The US CEO at the time, Dr. Laila Mintas, allegedly scuttled the deal. She claims she found aspects of the deal suspicious and raised them with FTX. However, Simic and his legal team have claimed she did so in retaliation after they rebuffed her attempts to squeeze more money out of them.
The two parties remain locked in a court battle. Meanwhile, FTX has gone belly-up after having been found to be misusing investors’ funds.
A subsequent attempt by PlayUp to go public through a SPAC deal also failed.
Throughout this saga, PlayUp was offering unregulated casino-like gambling with a product called PlayUp Slots+. This used an online historical horse racing model similar to Luckii. However, while the latter operates only in Oregon and with the state’s express permission, PlayUp Slots+ served users in dozens of states in a gray market capacity.
That landed PlayUp in trouble when it attempted to secure a sports betting license in Ohio. The Ohio Casino Control Commission deemed it to be an illegal gambling product. It allowed PlayUp to withdraw its application without an official denial on its record. In return, PlayUp paid $120,000 in fines, shut down Slots+, and agreed not to reapply in Ohio for a period of four years.
Can PlayUp Manage a Smooth Exit?
That series of mishaps left PlayUp without its largest potential financial backer, without a public listing, without its gray market slots product, and without an Ohio license. Running out of money, it has already cut its workforce by half, per LSR, and reportedly still owes money to some of its former employees.
It’s unclear who now plans to buy PlayUp, how much they have offered, or what they plan to do with its assets. Given how nothing else has gone smoothly for the company, however, we probably shouldn’t consider this a done deal until the ink is dry.