Wynn Resorts is spinning off its sports betting and iGaming subsidiary, Wynn Interactive, into an independent company.
The move led off Wynn’s first-quarter earnings call Monday. The spinoff comes through a merger with Austerlitz Acquisition Corp. I and the company will trade on Nasdaq under the symbol WBET. The symbol is a nod to its online gaming app, WynnBET.
“We are confident that this transaction will unlock the tremendous potential of Wynn Interactive to further accelerate growth and enable the business to capture the massive opportunity in North America,” CEO Matt Maddox said.
Wynn Interactive receives cash injection
Wynn Interactive received a $640 million cash infusion from the merger with Austerlitz, a special purpose acquisition company (SPAC) led by billionaire investor and Vegas Golden Knights owner Bill Foley. That money is expected to fuel a branding and marketing campaign to accelerate growth, according to a presentation posted following the earnings call.
The combined value of the merged companies is expected to be $3.2 billion. Wynn Resorts will maintain 58% of the company.
“Wynn Interactive is rapidly establishing a leadership position in what will ultimately be a $45 billion North American online sports betting and iGaming market through our relentless focus on product features, user experience and customer service,” Wynn Interactive President and Executive Director Craig Billings said.
The presentation shows a guided long-term mature online sports betting and iGaming share of 10-15%. By 2023, the company projects annual net revenue of $708 million, good for a 171% compound annual growth rate.
The presentation highlights “strong recent traction” in Michigan, where Wynn reportedly has an overall market share of 4%.
WynnBET continues to push into new markets
WynnBET is currently live in six states:
Wynn Interactive has market access to nine additional states, with others expected soon. During Wynn’s 2020 fourth-quarter earnings call, Maddox said WynnBET growth will ramp up through 2021 into the NFL season.
With one live state in November 2020, the company showed an annualized run rate of gross gaming revenue of $36 million. In March, with four states live, the AAR reached $103 million, according to the company.
Wynn Interactive still connected
Billings said Wynn Rewards will soon be fully integrated into WynnBET.
The hope is the database with more than 13 million users will provide a low customer-acquisition cost opportunity.
In turn, there is hope the online gaming will provide an omnichannel funnel for the land-based resorts.
Massachusetts a big opportunity?
Wynn generally has arrived late into legal markets. Executives believe its Encore Boston Harbor positions the company well for a legal Massachusetts sports betting market.
Billings said current Massachusetts sports betting discussions will be a big boost for the company. The company estimates a 20-30% market share in the market, which could potentially reach $850 million gross gaming revenue from sports betting.
“We’ll be ready to go day one, very strong home-court advantage there,” Billings said. “We have a $2 billion-plus asset in the middle of Boston and it will prove to be very fruitful.”
Wynn sports betting activity
In February, Wynn announced a partnership with sports podcast network Blue Wire. In April, the company announced a content marketing and affiliate relationship with Minute Media, parent to outlets like The Players’ Tribune, FanSided and The Big Lead.
On Monday, the company announced a partnership with the Memphis Grizzlies. The sports betting company is also a partner of the Detroit Pistons and an authorized operator of NASCAR. More signed deals are in place, according to the company.
Also announced Monday, the Wynn Field Club at Las Vegas’ Allegiant Stadium, a “nightlife experience” in the end zone.