Wynn is executing on its plan to build a sports betting business that does not lose “lots of money.”
Wynn executives said Tuesday they cut Interactive losses in half in Q1, with an EBITDA burn rate of $31.5 million, down from $79.4 million in Q4 2021.
At the same time, Interactive net gaming revenue grew 23%, per Wynn’s Q1 earnings report. That was despite “materially lower” marketing spend.
“The strategy we implemented late last year to manage the business with a long-term, shareholder-friendly view is working,” CEO Craig Billings said.
System working for Wynn?
Wynn said in November 2021 it was switching up its sports betting strategy to focus on creating a sustainable business that did not lose “lots and lots of money.”
Indeed, Wynn looked at getting out of the sports betting sector entirely.
The casino giant was shopping WynnBET and the Interactive division for a price in the mid-to-high hundreds of millions, sources told LSR.
Sticking with sports betting
However, Billings seemed to reaffirm Wynn’s commitment to online sports betting on Tuesday.
He told analysts: “We really do believe in the industry longer term.”
Billings added: “I will say that irrationality seems to be ebbing as valuations have come down. So I think that’s good for everybody.”
Catalysts for WynnBET
“We’ve always viewed Massachusetts as an important bootstrapping event for WynnBET,” Billings said. “If you look at some of our competitors and their market share in states where they have a physical presence, it’s clear that bricks and mortar is an advantage.
“So with a bill in reconciliation between the House and the Senate in Mass now, we’re preparing to be there day one. That will be an important event for the business.”
Wynn, of course, owns the Encore Boston Harbor resort in MA. Billings said he anticipated Governor Charlie Baker to sign a sports betting bill if it did emerge.
Boston-headquartered DraftKings is also pushing hard for legalization.
Billings declined to give any EBITDA targets for the online business going forward, saying it was highly dependent on MA.
However, he added: “The next step for us in light of real uncertainty in the market with respect to user acquisition behavior is to get to the EBITDA breakeven point.”
Online casino push for Wynn?
The second potential catalyst for Wynn Interactive is online gaming legislation.
Billings said Wynn had a “distinct advantage” in online gaming “based on brand.”
WynnBET has market access in 14 states, including New York.