WynnBET shutters operations across eight US states

Wynn Resorts is withdrawing its online sports betting and iGaming platform, WynnBET, from eight US states, becoming the latest company to scale back in an industry dominated by DraftKings and FanDuel.

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 Nevada and Massachusetts will continue unaffected while operations in New York and Michigan remain under review.

Wynn Resorts cited two primary reasons for this strategic shift. Firstly, the company acknowledged the substantial financial commitment required for marketing efforts aimed at acquiring sports-betting customers.

Secondly, the limited number of states legalising online casino games poses a challenge to achieving higher profitability.

Wynn Resorts’ CFO Julie Cameron-Doe commented: “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.”

“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 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,” she continued.

Strong competition

During Q2 2023, the group’s online division generated a loss of $25.7m, compared to a $57.3m loss in Q2 2022.

Presenting the results last week, Wynn Resorts CEO Craig Billings commented: “Our EBITDAR burn rate decreased both sequentially and year-over-year to $15m in Q2 2023. Our team continues to stay disciplined on costs, while driving improved marketing efficiency.”

Meanwhile, CFO Cameron-Doe hinted: “Sports betting is a tough business. It’s about the game of commodity, but we’re very focused on managing this business. We’ve got a very long-term shareholder-friendly view on it. So that’s our focus.”

Industry frontrunners DraftKings and FanDuel achieved positive EBITDA contributions in Q2.

Moreover, Penn Entertainment just sealed a substantial $2bn agreement with ESPN to launch ESPN Bet.

UAE plans

Moving onto different plans, as part of its strategic vision Wynn Resorts is set to commence the construction of Wynn Al Marjan Island, which CEO Billings described as a “must-see” attraction.

Wynn Al Marjan Island is a comprehensive luxury integrated resort project located in Ras Al Khaimah.

It is being undertaken in collaboration with RAK Hospitality Holding LLC and Al Marjan Island LLC. Wynn Resorts maintains a 40% equity ownership in the joint venture.

With an estimated project cost amounting to $3.9bn, the resort is anticipated to debut in the first quarter of 2027.

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