Wynn will cease operations in several states, including Arizona, Colorado, Indiana, Louisiana, New Jersey, Tennessee, Virginia, and West Virginia. Operations in New York and Michigan are still being reviewed. Only Nevada and Massachusetts will continue to operate as they have land-based properties.
The decision to curtail capital investment in WynnBet, the online sports betting platform, was made in favor of better uses of capital deployment for Wynn shareholders. Chief Financial Officer Julie Cameron-Doe emphasized the lack of iGaming legislation and other investment opportunities globally as factors leading to this decision. The focus will now primarily be on states where Wynn has a physical presence.
During the H1 earnings call, CEO Craig Billings clarified that Wynn aims to reduce cash burn quarter-over-quarter and is not committed to breaking even by the fourth quarter of 2023. Cameron-Doe highlighted the challenges of the sports betting business and Wynn’s long-term shareholder-friendly view.
As market leaders such as DraftKings and FanDuel achieve positive EBITDA in sports betting, competition in the industry is expected to intensify. Fanatics Betting and Gaming and Penn Entertainment’s ESPN Bet are preparing for significant expansion across the US.
WynnBet, Wynn Interactive’s main brand, might ultimately only be available in two states. In Massachusetts, the app had a total stake of $69.9m since the launch of the state’s mobile betting market, significantly lower compared to DraftKings’ $930.5m. In Michigan, WynnBet’s handle for the year-to-date is $12.3m, with adjusted gross revenue of $537,533. The brand performs better in iGaming, generating revenue of $28.2m from $30.2m in stakes. In New York, the handle for 2023 is $31.4m for revenue of $1.9m.
Wynn has also identified investment opportunities, including a pioneering project in the Middle East. The company plans to open the first integrated resort in the United Arab Emirates on Al Marjan Island in Ras Al-Khaimah, with an estimated cost of $3.90bn. The resort is scheduled to open in early 2027.
