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The United States operations of an Australia-based online gambling company are about to be bought out by a domestic corporation. No, that isn’t old news. This time, PlayUp and not PointsBet is effectively getting out of the US online gambling business.
According to Legal Sports Report‘s Matthew Waters, PlayUp will soon sell its US operations to an undisclosed publicly listed company. Waters’ reporting seems to suggest that the buyer is not currently a player in the industry. If that is the case, then the future of the company is currently quite fluid.
PlayUp’s US struggles could end with a sale
The history of PlayUp’s run at a share of the legal sports betting market in the United States has been fraught with difficulty. The most recent of those was an essential four-year ban on seeking a license in Ohio.
However, Waters chronicles other struggles, including:
- A dispute between the company and its former US chief executive officer
- A failed public listing
- Claims that employees haven’t been paid
- Funding that never came from failed cryptocurrency exchange FTX
Considering the litany of negative events, a sale probably represents one of the best possible outcomes for PlayUp at this point. Waters says current PlayUp CEO Daniel Simic shared that he expects to close on an offer sheet for the US operations this month.
Should that prove true, there will still be some business and regulatory matters to attend to. However, at some point, the mystery buyer will take on a company that has active sports betting licenses in two states plus the potential for a third.
What exactly the new owner will do with them and what that could mean for the online gambling industry in those states is an even greater mystery than who the new owner will be.
PlayUp’s new owner could consider expanding into an online casino
In the regulated US sports betting landscape, two operators are dominating the industry. DraftKings and FanDuel have won this portion of the market share competition for sports betting so far and their challenge is to hold onto those positions.
Thus, even if the acquirer of PlayUp’s Colorado and New Jersey licenses is serious about those operations, that company would effectively be fighting for crumbs remaining after DraftKings and FanDuel feast. At the same time, the fact that the buyer likely won’t depend on revenue from its online gambling product could make immediate profitability less of an issue.
Following that logic, the new owner might have at least a broad outline of a plan to eventually make PlayUp profitable in the US. It’s difficult to imagine charting such a course by focusing only on sports betting.
At this time, though, a PlayUp online casino product doesn’t exist. The acquirer could use the sportsbook as a way to get its feet wet in online gambling before developing such a platform. There is a tremendously greater opportunity for profitability with an online casino.
There is currently no evidence that the new owner wants to go in that direction, though. Whether that seems likely will all depend on what company is buying PlayUp US and what measures they take. In the end, this acquisition could resemble nothing but a failed side venture for a company that tried to diversify its revenue stream.
