Hammered by market leaders FanDuel, DraftKings and BetMGM, and faced with the additional threat of a revamped, Disney-powered Penn Sports, WynnBET–the digital sportsbook of heavy-hitter Wynn Resorts–has decided to pull-back from the explosive front of online US sports betting.
First launched and headquartered in New Jersey in 2020, WynnBET will now close operations in the states of Arizona, Colorado, Indiana, Louisiana, New Jersey, Tennessee, Virginia and West Virginia.
A rump of WynnBET sportsbooks will continue to run in Massachusetts and Nevada, where parent company Wynn Resorts have big-time upscale casinos, and another two remaining company sportsbooks, in Michigan and New York, will remain under review.
WynnBET, in so many words, has been an underperforming failure in most markets where it has operated.
It’s taken a beating from the ‘Big Three’ sports books–Flutter-owned FanDuel, DraftKings and the Entain–MGM Resorts joint-venture, Bet MGM–, which of late have all been returning positive EBITDAR and seem assured of healthy, soon-come, sustainable profitability.
The disappointing announcement of WynnBET’s pull-out was delegated to Julie Cameron-Doe, Chief Financial Officer of Wynn Resorts.
The Burn
“While we believe in the long-term prospects of iGaming,” affirmed Cameron-Doe. “The dearth of iGaming legislation, and the presence of numerous other investment opportunities available to us around the globe, have led us to the decision to curtail our capital investment in WynnBET — to focus primarily on those states where we maintain a physical presence.
“In light of the continued requirement for outsized marketing spend through user acquisition and promotions in online sports betting, we believe there are higher and better uses of capital deployment for Wynn Resorts shareholders.”
Founded in 2002 by former Mirage Resorts Chair and CEO Steve Wynn, Wynn Resorts has an annual turnover of some US$7 billion (£5.5bn), with casino resorts the Wynn Las Vegas and Encore Boston Harbor in the United States and two mega casinos in the China gambling entrepôt of Macau, the Wynn Macau and Wynn Palace Cotai.
The news of their WynnBET downgrade was revealed at the Wynn Resorts H1 Earnings Call last week.
Even though Wynn Interactive had “reduced” its EBITDAR burn rate to US$15 million (£11.8n) in Q2, Cameron-Dow, conceded:
“Sports betting is a tough business. It’s about the game of commodity.
“Wynn Resorts are very focused on managing this business. We’ve got a very long-term shareholder-friendly view on it. So that’s our focus.”
And it appears that Wynn’s focus has now shifted to the Mid-East, where it has plans to open the region’s first integrated resort in the United Arab Emirates.
Jumping from the heat of the iGaming cook house to the desert of Ras Al-Khaimah, one hopes that by returning to what it does best–bricks-and-mortar casino resorts–Wynn will rediscover its winning ways. And not get burned in the process.
