Unsuccessful NASDAQ listing leads 바카라Up to raise funds for Australian business
Fantasy sports gaming company 바카라Up, once backed by the family of former Australian Prime Minister Malcolm Turnbull, is currently seeking investors to raise $10 million capital following its unsuccessful attempt to list in the United States. The company’s efforts to list on any US exchanges have been unsuccessful.
바카라Up USA is up for sale
While 바카라Up’s Australian staff received their salaries last week, the company continues to struggle in the US market. Acquisition talks are ongoing, with CEO Daniel Simic aiming to sell 바카라Up USA to an unnamed US-listed operator. The deal includes a down payment to settle outstanding creditors and staff wages however the completion of the transaction remains uncertain.
바카라Up’s financial troubles have impacted its vendor relationships, with some debts stretching back to November 2021. Market access partner Caesars has already cut ties with 바카라Up due to missed payments, but they remain open to renegotiating an agreement.
US staff remain unpaid
The situation has left 바카라Up’s US headcount at a mere two employees, a significant decline from its peak of 40 employees in 2021. Staff members were officially terminated on 30 June, and despite assurances that they will be paid soon, many are still waiting to receive their owed severance and vacation pay. Some employees are owed as much as $45,000.
During acquisition talks, former employees of 바카라Up raised doubts about the deal’s completion. They also claim that not a single US employee has received their due paychecks, holiday or severance pay as legally entitled. However CEO Daniel Simic said that employees were paid in full, refuting claims of unpaid wages. He assured that due funds left 바카라Up account and employees will soon receive their missed payments. Payroll is currently being managed by an external accountancy agency.
Financial uncertainty and departure of employees
바카라Up’s plans for the US look unlikely to materialise and therefore the company is considering abandoning the US market after receiving offers from a US-listed business interested in acquiring its operations.. Earlier this year 바카라Up’s New Jersey licence was revoked. Furthermore its Colorado site remains in “maintenance mode” and the Ohio Casino Control Commission also denied the company’s licence application for its Slots+ product, leading to doubts about the company’s future operations in the US.
Amidst the financial turmoil, 바카라Up has witnessed a senior leadership exodus, with key personnel resigning in both Australia and the US. These challenges have cast a shadow over 바카라Up’s future, and it remains to be seen how the sale of the US company will unfold and if the company will be able to overcome its legal and financial difficulties.
바카라Up’s failure in the US is another casualty of FTX
The failure of 바카라Up’s expansion in the US controversial cryptocurrency exchange FTX had committed to investing US$35 million in 바카라Up before its collapse in November.
In 2020, 바카라Up raised $25 million with the intention of expanding into the US to capitalize on the deregulation of sports gambling. However, its attempts to list on any US exchanges have failed, and the US$35 million convertible note from FTX has complicated its financing options. The unresolved FTX convertible note issue means that 바카라 up cannot raise capital directly. It also means that 바카라UP is limited to raising no more than $10 million to avoid triggering a clause in the convertible note that could increase FTX’s equity in 바카라Up,. This has been a major concern for potential investors conducting due diligence on the company. CEO Simic explained that the additional capital raised will be used to sustain the company for the next 12 months.
To address its financial challenges, 바카라Up is now hoping to raise $10 million through a trust called BetClub. The transaction is managed by Sydney-based Evolution Capital and aims to secure 바카라Up while it works to resolve the FTX convertible note issue.
바카라Up intends to utilize the raised funds to strengthen its Australian business and promote its new product, Bettaverse, which combines its daily sports fantasy offering, DraftStars with its wagering product. DraftStars is considered to be a solid business and it was acquired by 바카라Up in 2018. It was initially founded in 2015 by Matthew Tripp and backed by James Packer’s CrownBet, with shareholders including Seven West Media, Fox Sports and the AFL.
Special Purpose Acquisition Company (SPAC) terminated deal
Earlier hopes for 바카라Up to list on the Nasdaq were dashed when a special purpose acquisition company (SPAC) terminated a deal in January to acquire the gaming business. The SPAC had valued 바카라Up at $US350 million but cited the company’s failure to deliver financial statements and its lack of funds for the transaction as reasons for the termination.
According to the company’s most recent financial accounts, 바카라Up generated US$20.8 million in revenue in 2021, up from $17.5 million in the previous year. However, it also recorded losses of $14.2 million and $8.9 million in those respective periods. Financial data for 2022 and 2023 are yet to be filed with the Australian Securities and Investments Commission. Despite the losses, Simic expressed optimism, stating that Australian revenues were around $32 million and the company has a promising path to profitability.
Conflict with Dr Laila Mintas
Furthermore, 바카라Up is currently embroiled in a legal battle with Dr Laila Mintas, its former US CEO in both American and Australian courts. Mintas, has taken legal action against the business, seeking $100 million in damages. But 바카라Up alleges that Laila Mintas threatened to disrupt the company’s deals over a salary dispute. Mintas denies the allegations and has counter-claimed against the company, blaming other 바카라Up executives. 바카라Up made additional claims, stating that Laila Mintas attempted to oust Daniel Simic from his role as the company’s global CEO.
In retaliation, Mintas filed a countersuit in January, characterizing herself as a “whistleblower” who faced retaliation after refusing to support a counter proposal to FTX’s $450 million offer. According to her, the counter offer demanded an additional $105 million to acquire another company and offer a retention bonuses to crucial 바카라Up personnel. Furthermore, she accused the company of withholding vital information about the FTX negotiations.
바카라Up’s US chairman, Dennis Drazin, has also reportedly resigned from his position, but he remains connected to the company as an investor and advisor.
Following the failure of the $450 million sale to FTX, 바카라Up tried to shift blame onto Mintas, an accusation she vehemently refuted. In the legal counter-argument, Mintas indicated that the deal fell apart due to Daniel Simic’s actions. As a result, she succeeded in having a restraining order against her overturned.
Way forward for 바카라Up
Although Simic confirmed that the website is in ‘maintenance mode’, it is still appears to be operating normally, allowing users to place bets without any visible issues.
In a recent written communication, Simic said “We are happy to place the website in ‘Maintenance Mode’ in New Jersey and have also sought permission to do the same in Colorado until our new platform is ready, our team is prepared and we have secured a new partner to replace FTX with the firepower to be highly successful in the USA”.
It is worth noting that 바카라Up had been providing regulated sports betting services exclusively in Colorado and New Jersey before facing recent regulatory challenges. Despite attempts to seek clarification from both the Department of Revenue and 바카라Up representatives, no responses were received at the time of writing this article.
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