PlayUp’s Future Hangs in the Balance as Acquisition by CrossBet Seems Increasingly Likely

PlayUp’s ongoing search for a way to escape its long-running regulatory and financial challenges is nearing a decisive moment. According to a recent Next.io report, shareholders are set for a December 10 vote for the sale of the company’s Australian gaming assets for AUD 18.6 million (12.11 million) to CrossBet. This proposal, shared with investors on November 10, confirms that the asset sale agreement will undergo a formal vote.

PlayUp Has Faced Substantial Setbacks

The deal validates long-running rumours that claimed PlayUp had been courting mid-tier operators for a potential acquisition offer. CrossBet has long been considered one of the most likely options due to the possible synergies between the two businesses. For PlayUp, the new proposition represents a clear solution to escape its tightening financial and regulatory challenges.

The Australian company has suffered from a series of failed deals, most famously the aborted $450 million sale of its US business to FTX in 2021. That collapse caused a fierce legal battle between CEO Daniel Simic and former US chief Laila Mintas, with Simic accusing Mintas of sabotaging the deal. While a Nevada court dismissed those accusations earlier this year, Mintas’ counterclaims are still active.

Sources close to the company now allege that Mintas will likely win in court, exposing PlayUp to significant liabilities. Meanwhile, PlayUp’s US operations, once central to its growth ambitions, have stalled. After New Jersey regulators revoked the firm’s licence, PlayUp shuttered its US sportsbook. Colorado soon took similar measures, drastically diminishing the company’s US growth potential.

Shareholders Reportedly Support the Deal

Domestic regulatory issues have added to the pressure. New South Wales authorities hit PlayUp with a record AUD 600,000 ($391,000) penalty in 2024 after an investigation uncovered dozens of illegal promotions on the company’s website. PlayUp faced accusations of offering account-opening bonuses and targeting people who did not hold betting accounts, practices banned under NSW law.

Shareholders Richard Sapford and Simic, who control almost half of the company, are expected to support the sale. However, investors must come to terms with the fact that the offer is a far cry from what the company could have been worth under different circumstances. Despite PlayUp’s mounting debt, its Australian arm still generates nearly AUD 40 million ($26.04 million) in annual revenue.

According to the terms of the CrossBet agreement, the buyer will assume AUD 8 million ($5.21 million) worth of liabilities, which consist of money owed to sporting bodies, government agencies, suppliers, and employees. CrossBet must repay the remaining AUD 7.5 million ($4.88 million) over five years in instalments of AUD 125,000 ($81,300). However, this plan hinges on PlayUp avoiding insolvency without its primary revenue source.