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Wynn Resorts (NASDAQ:WYNN) announced its decision last week to close the WynnBET online sports betting and iGaming platform in certain jurisdictions.
“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,” stated Chief Financial Officer Julie Cameron-Doe.
Wynn Resorts (WYNN) said that while it still believes 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 it to make the decision to curtail the capital investment in WynnBET to focus primarily on those states where the company maintains a physical presence. In conjunction with regulators, Wynn (WYNN) will seek to cease operations in Arizona, Colorado, Indiana, Louisiana, New Jersey, Tennessee, Virginia, and West Virginia as soon as possible. Operations in Nevada and Massachusetts will continue unaffected, and operations in New York and Michigan remain under review.
On Wall Street, analyst David Katz expects the casino company’s overall bottom line to improve due to the iGaming business segment not being profitable. Katz noted the segment lost $15M in Q2 of this year and $36M on a year-to-date basis. High marketing and promotional spending .
Next steps: The Las Vegas-based company may be pulling back on iGaming, but the opportunity for growth in the UAE is said to be very substantial. On the recent Wynn Resorts (WYNN) earnings call, executvies noted that construction is now underway on Wynn Al Marjan Island and over 40% of the required hotel piles are in the ground. The casino project is expected to be a growth driver for the casino company in the near future.
