Wynn Resorts Reduces WynnBET Operations To Focus On Cost Reduction
Wynn Resorts, one of the world’s leading casino operators, has decided to close its online WynnBET gambling facilities in eight U.S. states. According to the company, the online sports betting and iGaming platform will no longer be available in Arizona, Colorado, Indiana, Louisiana, New Jersey, Tennessee, Virginia, and West Virginia in line with the company’s capital deployment policies.
Reducing Platform Operations:
Julie Cameron-Doe, Chief Financial Officer of Wynn Resorts reportedly said: “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.”
She reportedly continued: “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.”
Eight States Concerned:
As reported, Wynn will work with the respective regulators and patrons to cease operations in the eight jurisdictions, with operations in Nevada and Massachusetts set to be continued and those in New York and Michigan remaining under the Company’s review and subject to the final decision at a later time.
As Las Vegas Review-Journal (LVRJ) reports, the reason to continue operations in Nevada may arise from the fact that the WynnBET customers in this state use a separate mobile app branded Wynn Sports Nevada which has features different to those offered by the main WynnBET platform. As indicated, Nevada and Massachusetts will see an extended operator’s presence.
High Expenses Driving Capital Allocation:
Wynn Resorts, the owner of luxurious casino resorts in Las Vegas, Boston, and Macau, has recently reported an EBITDA loss of $15 million for the second quarter of 2023 for its online business, with interactive revenues amounting to $25.9 million, according to LVRJ. The company reportedly indicated the costliness of iGaming legislation and promotional activities as the major reason to reduce the foothold of its online brand WynnBET.
Focusing on Cost Reduction:
As reported by iGB, Craig Billings, CEO of Wynn Resorts, used the recent earnings call to say that the company will focus on the loss reduction in the forthcoming quarters rather than try to break even by the end of the year. On the occasion, CFO Cameron-Doe reportedly said: “Sports betting’s a tough business. It’s about the game of commodity. “[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.”
The decision has been made in the circumstances where market leaders DraftKings and FanDuel reportedly recorded positive EBITDA results for sports betting, with tough competitors like Fanatics Betting and Gaming and Penn Entertainment’s ESPN Bet preparing for further US expansions.