According to a report in the New York Post, Wynn Resorts intends to sell its sports betting business for approximately $500 million.
High running costs and prohibitive state taxes have been cited in the report as the main reasons for the sale. The report also notes that the company has faced significant financial losses as it works to attract customers in newly regulated markets.
The reported $500 million price tag is a steep discount on the $3.2 billion valuation floated just last year and comes less than six months after the operator set out plans for a big spring launch featuring Shaquille O’Neal as a brand ambassador.
However, in November of last year, the company announced that it had scrapped plans to merge Wynn Interactive with Austerlitz Acquisition Corp. — a company owned by Las Vegas Knights owner Bill Foley.
The deal would have seen Wynn create a public company valued at $3.2 billion. Although the merger would have given WynnBet a $640 million cash injection for marketing purposes, CEO Matt Maddox said at the time that he didn’t see the sense in spending more money in promotions that yielded poor results stating:
“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.”
A Wynn spokesperson told the New York Post that they wouldn’t comment on market speculation surrounding the potential sale. However, they did say:
“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 way that will actually create long-term shareholder value.”
WynnBet is one of the 9 approved mobile sports betting operators issued a license by the New York Gaming Commission but has yet to launch in the state.
An experienced iGaming commentator and analyst based in New York City - Jenny reports on regulation and gambling industry news and events.