Wynn Resorts announced Friday that it would immediately shut down its WynnBET online casino and sports betting operations in eight states, but would keep operations running in Massachusetts and Nevada while placing them “under review” in Michigan and New York.
The company said it would cease igaming operations in eight states — Arizona, Colorado, Indiana, Louisiana, New Jersey, Tennessee, Virginia, and West Virginia.
“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,” Wynn Resorts CFO Julie Cameron-Doe said in a statement.
By retaining WynnBET’s presence in Massachusetts and Nevada, the parent company will continue to have online products available for customers at the brick-and-mortar casinos it owns and operates in both states — Encore Boston Harbor and Wynn Las Vegas, respectively — as well as for patrons across the entirety of both states.
“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,” Cameron-Doe said.
It’s likely that Wynn Resorts is interested in keeping Michigan and New York because they are among the largest for igaming.
Losses Narrowed, But Were Still Tops
Friday’s announcement may have come as a bit of a surprise to some observers. After all, WynnBET had just relaunched its online casino and sportsbook in West Virginia in late June.
But during its Q2 2023 presentation and earnings call on Wednesday, Wynn Resorts reported that its Wynn Interactive division had an operating loss of $25.7 million during the quarter and $59.1 million for 1H 2023.
While losses had narrowed year-over-year (from $57.3 million in Q2 2022 and $162.4 million in 1H 2022), Wynn Interactive posted the biggest losses among all of the company’s divisions — for both the second quarter and the first half of 2023.
“I don’t think we ever said that [Wynn Interactive] would be breakeven in Q4 2023,” CEO Craig Billings said during the Q&A portion of Wednesday’s call. He made the comment after an analyst asked if Wynn Interactive was on track to turn profitable in the fourth quarter.
“What we are focused on is making sure that [losses] go down every quarter.”
Remarks by Cameron-Doe that followed may have foreshadowed Friday’s turn of events.
“Sports betting is a tough business,” she said. She later added, “We’ve got a very long-term shareholder-friendly view on it.”
A Busy Week For Sportsbook News
The news that WynnBET would end its operations in eight states capped off a busy week in US sports betting news.
Late Tuesday, Penn Entertainment announced it had entered into a partnership valued at $1.5 billion with ESPN. Under the agreement, Penn would rebrand its Barstool Sportsbook as ESPN Bets. A November launch is planned in more than a dozen states.
At the same time, Penn agreed to sell Barstool Sports back to its founder, Dave Portnoy. The divestiture allows Penn and Portnoy to go their separate ways — perhaps a good thing, since Portnoy blames his controversies for Barstool failing to obtain a sports betting license in several states, and Penn appeared to agree with his assessment.
If WynnBET were to cease its operations entirely, it would be the latest sportsbook since FOX Bet Sportsbook announced on July 31 that it would cease operations on August 31.
