Wynn Resorts last week announced that its subsidiary, WynnBET would be ceasing operations in most of the states where it currently operates, leaving Nevada and Massachusetts as the only markets that will continue.
The company said it will cease operations in Arizona, Colorado, Indiana, Louisiana, New Jersey, Tennessee, Virginia and West Virginia as soon as possible. Operations in New York and Michigan remain under review.
“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,” said Julie Cameron-Doe, chief financial officer of Wynn Resorts.
“While we believe in the long-term prospects of iGaming, the dearth of iGaming legislation and the presence of numerous other investment opportunities available to us around the globe, which includes the United Arab Emirates, New York City and Macau, 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.”
The news comes in the same week that Penn Entertainment ended its relationship with Barstool, and signed a new sports book deal with ESPN (see cover story), and just two weeks after Flutter Entertainment announced that it was phasing out its FoxBET brand. These moves reflect the softness in the sports betting market and the dominant positions held by Flutter brand FanDuel, DraftKings and BetMGM.
Wynn Resorts is one of the major land-based casino brands, and was expected to be a strong competitor in the online market, but like most land-based brands, found it difficult to gain traction in such a competitive market.
It’s unclear what will happen with the iGaming side of the WynnBET brand in New Jersey, West Virginia, and Michigan, which all offer online casino games. By and large, iGaming has proven to be a more lucrative venture than sports betting.
The company lost over $100 million on WynnBET in the third quarter of 2022, and was expected to lose even more in the fourth quarter.
Prior to last week’s announcement, Wynn Resorts CEO Craig Billings said during a recent earnings call that prospects for WynnBET weren’t very positive.
“I don’t think we ever said it would be breakeven in the fourth quarter,” he said. “But what we are focused on is making sure that it goes down every quarter.”
