The winding journey of WynnBet took another turn this week as its parent company announced plans to stop sports betting and iGaming operations in most of its markets.
Wynn Resorts announced Friday it will close its online WynnBet operations in eight markets “as soon as possible.” Only two jurisdictions are guaranteed to remain unaffected: Nevada and Massachusetts, where the company operates physical casinos.
“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,” Wynn Chief Financial Officer Julie Cameron-Doe said in a release.
The news comes after the company relaunched a new WynnBet platform in six states just last week. A company spokesperson declined to comment further on the situation.
WynnBet winding sports betting trip
Wynn invested $80 million in BetBull in 2018 and created its Wynn Interactive division. In 2021, Wynn Interactive was slated to go public in a SPAC deal but eventually fell through.
In February 2021, Wynn expected to spend heavily on sports betting ahead of the 2021 NFL betting season, seeing it as “quite an opportunity.” By November 2021, however, Wynn changed its tune and decided to scale back marketing to preserve cash.
Recently, Wynn was said to be interested in the new Kentucky sports betting market. In fact, the company announced a relaunch of its multi-state WynnBet app just this week.
WynnBet shutters eight markets
The company said it is still reviewing its operations in New York and Michigan.
The eight markets slated for closure are:
Market share failure
In markets where WynnBet is live and information is broken down by operator, it has a 0.97% handle market share and 0.57% of sports betting revenue in 2023.
In Massachusetts, the operator has a 3.7% handle market share and 2.1% of revenue.
iGaming a focus for WynnBet
Cameron-Doe said iGaming will remain a focus for WynnBet, but it is not moving at a strong pace at the moment.
“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 said.
Wynn could remain in Michigan for its iGaming market. WynnBet has a 3.2% of Michigan iGaming revenue year-to-date in 2023, good for seventh of 15 operators.
It generated approximately $50 million in iGaming revenue in the past two years.
New York considerations
WynnBet reviewing operations in New York could provide a potential pathway for Penn Entertainment’s ESPN Bet to enter the market. WynnBet amassed just 0.6% lifetime online sports betting handle share in the Empire State.
Wynn also partnered with chairman Stephen Ross‘s Related Companies on a reported $10 billion bid for a downstate casino in Manhattan-Hudson Yards.
Sports betting a tough business
WynnBet is the latest operator to reduce or shutter operations as the market contracts. Just this week, Penn Entertainment decided to move on from its Barstool Sportsbook in favor of a new partnership with ESPN.
“Sports betting’s a tough business,” Cameron-Doe said during Wynn’s earnings call this week. “It’s about the game of commodity. They’re difficult businesses, but we’re very focused on managing this business. We’ve got a very long-term shareholder-friendly view on it.”
In the past year, multiple online sportsbooks completely closed including:
- Fubo Sportsbook
- Fox Bet
- MaximBet
- TwinSpires
