- WynnBet ceases operations in Arizona, Colorado, Indiana, Louisiana, New Jersey, Tennessee, Virginia and West Virginia
- Downsizing follows planned rollout of ESPN Bet this autumn
WynnBet has ceased operations in eight US states, citing high marketing spend and promotions in online sports betting, as well as a “dearth of iGaming legislation”.
Wynn Resorts’ online sports betting and casino platform had operated in 12 states but has now exited Arizona, Colorado, Indiana, Louisiana, New Jersey, Tennessee, Virginia and West Virginia. WynnBet will continue to operate in Massachusetts and Nevada, where it has land-based properties.
WynnBet is also reviewing whether to remain in Michigan and New York. For now, the latter’s sportsbook will remain operational. WynnBet’s sports betting offering in Michigan will be shutting down but its casino product will remain online.
“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,” said Wynn Resorts’ chief financial officer Julie Cameron-Doe.
“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.”
WynnBet’s departure from eight states is the latest example of the consolidating US sports market.
In February, the American Gaming Association (AGA) revealed that sportsbook revenue in the US racked in a record US$7.5 billion in 2022, up 75 per cent on 2021. However, amid all the interest from punters, FanDuel and DraftKings dominate the market, outstripping the likes of BetMGM and Caesars Sportsbook.
WynnBet, which has partnered with the National Football League (NFL) and several of its teams, including the Indianapolis Colts, would have had to carry on spending big to stand any chance of securing a decent chunk of the market – something it decided wasn’t viable. In January 2022, the New York Post reported Wynn Resorts was looking to offload its sports betting business for around US$500 million after floating a US$3 billion valuation less than a year prior.
FanDuel and DraftKings have incurred heavy losses on their way to becoming the go-to destinations for sports bettors in the states. The former expects 2023 to be the first time it achieves full-year profitability, with its parent company Flutter forecasting the total addressable US betting market to be worth more than US$40 billion by 2030.
Other companies still believe they can challenge the market leaders, which had only made WynnBet’s job harder. Fanatics is expected to acquire PointsBet’s US operations and last week saw ESPN partner with Penn Entertainment to launch ESPN Bet. The latter is taking over from Penn’s Barstool Sportsbook which had a market share of 1.9 per cent in May, highlighting the work ahead as the Disney-owned network bids to make a splash in the sportsbook space.