Talks over a potential acquisition are ongoing, although former PlayUp employees cast doubt on whether this will come to pass.
Former staff members spoke out on Friday, denying chief executive Daniel Simic’s claim staff were paid in full. “Not a single US employee has been paid their missing paycheck and holiday pay or severance that they are legally entitled to,” they told iGB.
Employees were told payroll for 16 to 30 June is due to be paid “soon”, after being told that salaries may be late just over a month ago. However it remains unclear when money owed for severance and paid time off will be handed over, with some owed as much as $45,000.
“As of 21 July the US staff hasn’t seen a penny,” a source said.
“Some people may have filed a wage claim, but I am not aware of any pending group lawsuits at this time,” they added. “Most people just want to get their money and move on in life.”
Simic told iGB the funds have left the PlayUp account and employees will receive their missed payments soon. He added payroll is being handed over to an external accountancy agency to review missed payments.
PlayUp’s US headcount dwindles to two
The operator had 10 US staff at the time of the 16-30 June payroll, down from a peak of 40 employees in 2021. Staff were officially terminated on 30 June, with access to email and the PlayUp platform cut off without notice.
Around six staff continued, working unpaid, but that number has fallen with few signs of a resolution to its struggles, a source explained.
Simic disputes anyone is still working unpaid and said the business has had zero employees on the books since 30 June.
Despite its US struggles PlayUp’s Australian staff were paid last week and the business continues to advertise jobs in that team. Another source suggested the business’ struggles had reached Australia resulting in the business being subject to Safe Harbour law.
This protects directors from personal liability, provided they demonstrate efforts to restructure a business to avoid insolvency. Cutting ties with US staff and restructuring was a way to save money and avoid paying debts, they said.
PlayUp acquisition talks ongoing
Simic aims to sell PlayUp USA, telling iGB last week a transaction is in the final stages. The buyer, he said, is an unnamed US-listed operator. The deal includes a down payment to pay patrons and staff, although iGB cannot confirm whether this has reached the operator’s bank account.
Divestment plans stretch back to July last year, when a strategic review was launched. It follows a failed sale to stricken cryptocurrency exchange FTX and scrapped plans for a special purpose acquisition company (SPAC) combination.
Sources are unclear whether the deal will ultimately go through. Amelco currently powers PlayUp’s sportsbook and an in-house platform is under development.
However vendors are also awaiting payment, with some debts going back to November 2021. Market access partner Caesars cut ties with the business over missed payments, although it remains open to renegotiating an agreement.
“PlayUp’s funding arrangements were severely affected when FTX entered bankruptcy in November 2022,” Simic told iGB. “We are working with our suppliers and I am very grateful to them.”
Sources suggest PlayUp’s US debt totals $10m.
Options for US relaunch diminishing
Whether PlayUp will have access to states for its relaunch remains to be seen. Its New Jersey licence was revoked last week and its Colorado site is in “maintenance mode”.
The Ohio Casino Control Commission (OCCC) denied its licence application over its Slots+ product, which uses historical pari-mutuel wagering outcomes in place of a random number generator for slots, match 3 and scratchcard games. This, the OCCC said, was illegal under Ohio law.
Senior leadership exodus and more legal woes
Sources also suggest staff departures stretch beyond the US. Senior staff in Australia have resigned in the last month including group CFO Glenn MacPherson and general counsel Ashley Kerr.
PlayUp’s US chairman, Dennis Drazin, has also reportedly stepped down from his role, but is still involved in the business as an investor and an advisor.
Former US CEO Laila Mintas, meanwhile, has filed a claim for $100m in damages from the business.
After a $450m sale to FTX collapsed, PlayUp attempted to blame Mintas, who strenuously denied the allegations.
She submitted a detailed legal response suggesting the deal collapsed due to Simic’s actions and had a restraining order overturned as a result.
Original article: https://igamingbusiness.com/finance/playup-troubles-acquisition-claims-attacked/
