Online Sportsbook PlayUp Strikes SPAC Deal, Plans to Keep Expanding

PlayUp and IG Acquisition Corp., a publicly-traded SPAC, announced on Thursday that they have struck a deal that will eventually see the bookmaker's shares listed on the NASDAQ.

Last Updated: Sep 23, 2022 10:20 AM ET Read Time: 3 min
Online Sports Betting
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PlayUp Ltd. plans to go public via a special purpose acquisition company, or SPAC, as the online sports betting operator aims to shrug off the recent turmoil in the financial markets and continue expanding its business. 

PlayUp and IG Acquisition Corp., a publicly-traded SPAC, announced on Thursday that they have struck a deal to combine their businesses and to list the combined entity's shares on the NASDAQ using a new Irish company. 

The transaction values PlayUp at $350 million and is expected to close in the first quarter of 2023 subject to certain approvals, a press release said. 

“PlayUp believes this transaction will enable us to continue investing in our proprietary technology and deliver on our aspirations to be the unrivaled entertainment and betting platform of the future,” said Daniel Simic, CEO of PlayUp, in a press release. “We envision a world where our players can enhance their experience betting on the products they already love plus interact with the next generation of immersive betting products that embrace newer technologies such as AR and VR.” 

Mergers and acquisitions in the legal sports betting sector were plentiful in recent years. Rising competition and a floundering stock market, however, have cooled interest in this once-hot sector of late.

Nevertheless, IG Acquisition (IGAC) is betting PlayUp is worth the challenge.

IGAC says no platform offers every type of wagering product under one roof — from sports betting, slots, table games, and the lottery, but that PlayUp, which was founded in 2014, is poised to deliver that betting buffet. And, with its new financial backing and publicly-traded status, PlayUp “intends to continue to aggressively pursue its expansion strategy” in the U.S. and around the world. 

“We are excited about this transaction because we believe PlayUp is the closest to achieving our shared vision for the future of online betting – a platform that offers consumers any type of digital betting they want, from one app and one digital wallet, anywhere in the world where it's legal,” said Bradley Tusk, chairman of IGAC, in Thursday’s release.

Time to SPAC-ulate? 

PlayUp is well known in its home country of Australia. The company, however, has a relatively small footprint in the United States, with operations in Colorado and New Jersey. Still, PlayUp grew gross revenues by 56% year-over-year, Thursday’s release noted, and adding more states to its portfolio could significantly boost PlayUp’s top line

The company does have near-term plans to launch in Indiana, Iowa, and Ohio. Indiana and Iowa already have a thriving online sports betting scene, while Ohio is set to debut legal sports betting on Jan. 1, 2023.

It takes a lot of money to attract sports bettors in a new jurisdiction, however, and most sportsbooks don’t expect to break even in the first two years of a new state launch. The good news for PlayUp is that joining IGAC and going public could provide it with a cash injection, which could be good news for sports bettors who could benefit from a healthier promotions budget.

The acquisition will also benefit sports bettors looking to trade bets in the secondary market.

Recently, PlayUp announced a partnership with BetSwap. Through BetSwap, bettors have access to bets that are no longer available from sportsbooks. With its newfound funding, PlayUp will have the wherewithal to integrate BetSwap’s service. 

Following in their footsteps 

Similar to PlayUp, DraftKings debuted on the NASDAQ stock exchange in April 2020. And, instead of going through the traditional IPO process — involving expensive investment banks and daunting regulations — DraftKings was acquired by a SPAC. 

A SPAC — sometimes referred to as a blank-check company — raises money with the express purpose of acquiring a private company to take public when it lists itself on the market. Then, when a SPAC acquires a private company, the acquired company becomes public by default.  

While SPACs were a hot trend during the pandemic, their dealmaking has cooled recently, as rising consumer prices and interest rates have put a damper on stock markets. Last November, for example, a SPAC deal involving WynnBET fell apart.

In 2021, 589 private companies IPO’d through a SPAC. Meanwhile, only 27 companies did the same in the first half of 2022. 

IGAC completed an initial public offering in October 2020 that raised around $300 million.

"The transaction is expected to provide PlayUp with access to fresh capital to continue expanding its vision of a true single destination for the future of online betting," said Christian Goode, CEO of IGAC, in the release.

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