Australian company PlayUp has not had a good run in the U.S. They were suspended in the only two states they operated: Colorado and New Jersey. Employees had trouble getting paid.
CEO Daniel Simic claims to be close to selling the company after a planned deal with troubled cryptocurrency exchange FTX collapsed.
The New Jersey Department of Gaming Enforcement (NJDGE) accused PlayUp of improper payroll filing then ordered wagering to cease.
Eventually these pitfalls will be repaired, but hopefully there’s a lesson to be learned.
If you’re not from the U.S., don’t assume that Australian play and Australian regulations work in the U.S. And domestic execs need to realize what they don’t know.
“They tried to mirror the Australian business in the U.S., and you just can’t do that,” a former PlayUp employee told Gaming Today.
Another noted a “sheer lack of knowledge” by PlayUp’s home office and Simic in operating a business of any kind in the United States and had to put up with pushback after trying to educate Australian executives about the process.
“Anytime you enter into a new market, you need to take a deep dive to understand not just where the opportunities are but the potential pitfalls,” Brendan Bussmann, B2 Global managing partner, said.
In July, PlayUp’s site entered a maintenance mode barred from any transactions other than refunding customer money, according to the NJDGE.
Simic seems to have a positive attitude despite his troubles.
“We plan on releasing a new platform whereby we will relaunch in N.J. and CO at the same time,” Simic told Legal Sports Report. “With N.J., we simply have to resolve the issues at hand which we are working through now and reapply for a transactional waiver. As for CO, we requested permission to go into maintenance mode, but will relaunch at some time. (It’s) not cost efficient to run one state on its own.”
Simic has not responded to emails from Gaming Today.
Simic acquired the remnants of PlayUp, including its name, out of liquidation in 2017 with high hopes for its future.
FTX founder Sam Bankman-Fried had seen PlayUp as an entry point for cryptocurrency into the expanding American gambling market. Then came FTX’s crash. Still the deal was seen as a coup by rank-and-file PlayUp employees in the U.S., given the size of the investment, the growing profile of crypto, and the technology platform FTX wielded.
All of PlayUp’s U.S. workers were technically laid off on June 30. PTO payouts and severance package problems have been outsourced, with one former employee admitting, “I’m not expecting to see it.” But salaries have been paid out, according to a source.
The reason, they said: there’s not much left to buy. There’s no proprietary tech, the market is soft, and the assets are “toxic.”
Simic is cast by his former employees as ill-informed in basic bookmaking practices, concurrently mettlesome in daily activities well below CEO-level, and unavailable to make decisions in keeping with his job title.
Former employees interviewed by Gaming Today felt that Simic’s leadership exacerbated two key forces in PlayUp’s troubles: 1) trying to treat American sports betting markets like one national entity, and 2) not understanding the life cycle of a start-up endeavor.
Simic believed regaining permission to offer bets in the state would be a quick process when it could take as long as 18 months in a state NJDGE director David Roebuck has referred to as the “platinum standard” in the U.S.
There was also a mass resignation when the FTX deal cratered and in the most recent phases of problems led to the departure of Dennis Drazin, the chairman and CEO of Darby Development, which operates Monmouth Park racecourse in New Jersey.
