PlayUp pauses $10m capital raise after US business hit by regulator

PlayUp will also go offline in Colorado, the only other US state it operates in.

PlayUp attempted to sell its US operations for $US450 million ($668 million) to FTX, but the deal fell apart in late 2021. The cryptocurrency exchange, run by Sam Bankman-Fried, later collapsed. PlayUp’s proposed merger with a special purpose acquisition vehicle also dissolved in January.

“Despite the SPAC’s repeated requests for the company financial statements, the company has failed to deliver the company financial statements and has provided no indication of when the company financial statements will be delivered or if they will be delivered at all,” IG Acquisition Corp, the SPAC, said in a statement to the Securities and Exchange Commission in January.

Mr Simic said PlayUp did not deliver the accounts because it became clear the SPAC did not have the money for the $US350 million transaction.

“In contrast to the prevailing narrative, the directors of PlayUp and its advisers concluded that proceeding with the SPAC transaction was no longer feasible,” Mr Simic said.

PlayUp’s attempt at offloading its US assets comes after the shareholders at ASX-listed bookmaker PointsBet approved a $US225 million sale of its business in the country to Florida’s Fanatics earlier this month.


Start from scratch

If PlayUp, or its new US owner, wants to reapply for transactional waivers to recommence operations in New Jersey, the company needs to submit its entire platform for a compliance review, the regulator said.

“At the right time, this is exactly what PlayUp will do,” Mr Simic said on Monday.

On June 29, the New Jersey regulator, known as the NJDGE, asked PlayUp for bank statements and payroll from January to June, and employee money withheld for tax. The NJDGE said it sent the request to Sydney-based chief financial officer Glenn MacPherson, but he had left the company. During a call with Mr Simic on July 7, the regulator gave PlayUp a week to submit the information. By July 14, PlayUp had provided payroll summary and statements for January, and a quarterly tax filing from March, prompting a warning from the NJDGE that its information was not sufficient.

The authority raised other non-compliance issues, including outstanding invoices owed to the gaming authority, reduced headcount in New Jersey, and PlayUp’s claims it was investigating potential fraud for a patron who requested a withdrawal in March. The company did not notify the NJDGE and could not explain the delay in finalising its investigation.

The NJDGE said PlayUp’s non-compliance demonstrated it could not currently “offer real money sports wagering to New Jersey customers at a standard required by division statutes and regulations,” NJDGE director David Rebuck wrote to Mr Simic last week. “PlayUp is not permitted to transact any new internet gaming or sports wagering related business with any New Jersey casino or racetrack.”

Mr Rebuck said the authority reserves the right for disciplinary action.


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