WynnBET has informed regulators in eight states that it wants out and is formulating an exit strategy to leave those markets, mirroring the complex landscape of U.S. sports betting. Reports are that the online sports betting platform will remain active in those states in which it has retail sportsbooks as well as a few others.
Shutting the Lights
In what has become a more common occurrence, less popular online sports betting shops are shutting down rather than competing in an industry dominated by the duopoly of FanDuel and DraftKings, in addition to a few distant competitors.
Consolidation has been expected in the industry and we have already seen examples of that happening with companies like PointsBet selling their U.S. assets and licenses to Fanatics. The latest example is the announcement that WynnBET would be bailing on eight states as soon as possible
Those doing business with WynnBET in Arizona, Colorado, Indiana, Louisiana, New Jersey, Tennessee, Virginia, and West Virginia should prepare to liquidate their accounts as soon as possible.
“Sports betting’s a tough business,” Julie Cameron-Doe, Wynn Resorts’ chief financial officer, said on Wednesday’s earnings call. “It’s about the game of commodity. They’re difficult businesses, but we’re very focused on managing this business.”
Yet, customers with WynnBET mobile accounts in Massachusetts and Nevada should be fine as the company plans on remaining in those markets as they have retail sportsbooks in both states. However, WynnBET is currently under review in Michigan and New York, leading to speculation about whether or not it will continue servicing those states.
Looking to Turn a Profit
WynnBET is a division of Wynn Interactive and both have struggled financially. Wynn Resorts is the parent company and its CFO, Julie Cameron-Doe, issued a statement concerning its financial woes, “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.”
Wynn Resorts CEO Craig Billings was questioned about reducing the losses of Wynn Interactive and the deleterious effects it has had on the bottom line along with the chances of it gaining profitability in the fourth quarter of this year.
“I don’t think we ever said it would be break-even in the fourth quarter,” Billings said. “But what we are focused on is making sure that it goes down every quarter.”
Positioning for Success
Earlier last year, shortly before retail and mobile sports betting launched in the Bay State where Wynn has a Las Vegas-style hotel and casino located in Everett, Massachusetts, Billings was asked about the market and his company’s place in it.
He told analysts: “We really do believe in the industry longer term. 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,” said Billings.
He also believed the frenetic pace and exorbitant lengths to which companies fought for early adopters, including sign-up bonuses of as much as $3000 in insurance bets, has slowed which is good for the industry. “I will say that irrationality seems to be ebbing as valuations have come down. So, I think that’s good for everybody.”
Calculators
