Wynn Resorts is looking to sell its online sports betting business at a discounted price, according to a report by the New York Post.
The outlet has reported that Wynn has set an asking price for its online sports betting arm of $500m, significantly lower than the $3bn valuation made less than a year ago after notable losses due to “stiff taxes and costly promotions” needed to attract customers.
Back in August, Wynn prepared the launch of WynnBET, partnering with NBA icon Shaquille O’Neal as a brand ambassador. O’Neal sold his minority stake in the Sacramento Kings so that he could cooperate with the operator without violating the NBA’s gambling rules.
By November, Wynn Resorts had canceled its plans and declared it would be merging Wynn Interactive with Austerlitz Acquisition Corp, a blank-check company of Las Vegas Knights owner Bill Folley. Alongside creating a public company with a $3.2bn valuation, the deal would have given WynnBet a $640m fund for marketing.
After indicating that the app was likely to spend $100m in both Q3 and Q4, outgoing CEO Matt Maddox said the following on a November 10 earnings call: “Looking at Wynn Interactive, we launched lots of new products this quarter that we’re very proud of. We made great progress in Arizona with first-time depositors. And we’re seeing good customer feedback and our retention is quite strong.
“However, the market is really not sustainable right now. Competitors are spending too much to get customers. And the economics are just not something that we’re going to participate in, in the short term. So while we built the brand, we launched the product in the third quarter, we’re going to be focused on building a long-term business that’s sustainable, that is not losing lots and lots of money.
“So we are shifting our strategy to think about the future, think about the long term, think about cash preservation. And we remain very confident that we’ll create significant value for the Wynn Resort shareholders with our digital strategy.”
CFO Craig Billings said on the same call: “While sports betting remains an exciting, high-growth market and will potentially be a $30bn to $40bn TAM over time, the marketplace is proving to be very competitive with multiple operators deploying meaningful marketing dollars, driving high cost per acquisition and significant customer bonus offers.”
Wynn currently holds a conditional online sports betting license in New York but is yet to launch in the market since it went live earlier this month.
In a statement to The Post, a Wynn spokesperson said: “We were clear on our last earnings call about the current highly competitive nature of the online sports betting market and our desire to operate that business in a way that will actually create long-term shareholder value.”
