PlayUp May Exit US Market in Search of Financial Support
PlayUp, an Australian sportsbook operator, might exit the American gambling market. The business is facing trouble finding a buyer and needs to pull in funds to survive. At the moment, PlayUp offers mobile betting in Colorado and New Jersey, which shows its minor role in the U.S. sports wagering industry.
This news comes after PlayUp said it was close to selling its U.S. operations to an unspecified, publicly traded company, a deal expected to complete this quarter. Sources close to PlayUp hinted the company could consider leaving the U.S. due to the necessity of raising $10 million. Australia's Evolution Capital is spearheading the effort to get the needed funds.
PlayUp CEO Daniel Simic shared with the Australian Financial Review that the funding is taking place through its BetClub business. This is due to the involvement with the now-defunct cryptocurrency exchange operator FTX Holdings.
PlayUp Suffering from Its FTX Connection
FTX Holdings could prove harmful for PlayUp. In 2021, the company received a $35 million investment from the crypto exchange in the form of a convertible note allowing FTX to become a PlayUp shareholder. However, if PlayUp raises more capital in a separate transaction, FTX's stake would expand which would help FTX clients but not PlayUp shareholders. FTX's connection to PlayUp has caused distress for creditors and prospective buyers of US operations.
Last year, PlayUp had a deal in progress with IG Acquisition Corp., a special purpose acquisition company managed by Bradley Tusk. However, that agreement fell apart in January, as IG cited PlayUp's failure to give financial details. PlayUp acknowledged the issue but also stated it doubted IG had enough capital for a $350 million deal.
Not the Only One
The U.S. is the biggest sports betting market globally and is also a highly competitive space. This is evident in the ascendancy of FanDuel and DraftKings, who maintain a duopoly. Despite having other significant players such as BetMGM and Caesars Sportsbook, smaller companies like PlayUp have struggled to keep up with the financial requirements to attract and maintain customers in America.
PlayUp isn't the first Australian gaming operator to part ways with the U.S. to prioritize profitable activities at home. PointsBet (OTC: PBTHF) is doing similarly by selling its American unit to Fanatics for $225 million, a deal announced last month.
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Source: www.casino.org
