Wynn Interactive unwilling to engage in “unsustainable user acquisition blitz” in US
In January, the New York Post said Wynn had considered selling Wynn Interactive for as little as $500m, despite the segment being valued at more than $3bn just one year prior.
When asked about the sale on yesterday’s Q4 webcast, CEO Billings said he was not prepared to comment on “market rumours and random press reports”.
“We were pretty explicit on the Q3 call about not engaging in the unsustainable user acquisition blitz that has emerged this NFL season, and that we would take a more measured approach,” said Billings, before pointing out that online casino was a far more interesting prospect for the business.
However, ambition in this space has a ceiling due to the fact iGaming regulation is limited to just six US states at present; Connecticut, Delaware, Michigan, New Jersey, Pennsylvania and West Virginia.“In the iGaming business, where we have actually seen pretty reasonable success, there is a logical place for us in that business longer term,” said Billings.
“Unfortunately, it is not a humongous TAM right now. Sports betting is most of the addressable market and betting is where most of the irrational behaviour is taking place,” he added.
The flagship brand in the Wynn Interactive portfolio is WynnBet, which offers online sports betting and iGaming to US consumers. It launched in New York in February.
On the Q4 webcast, Billings insisted to analysts that Wynn would find a way to generate shareholder value from that business and was biding it’s time to work out a strategy.
“We’re going to be really focused on the user acquisition side, as well as focused on the product side, and we’re going to see how the end market really behaves over the next several quarters,” said Billings. “Then we will figure it out accordingly.”
Wynn Resorts’ share price climbed by more than 4% yesterday to $96.26 per share in wake of the operator’s Q4 financial results.