Wynn Resorts Look Set To Sell Struggling Sports Betting Business
The Las Vegas-based operator has struggled in recent months to effectively drive the performance of its fledgling WynnBet app. The sports betting platform has failed to ignite the imagination of punters, and has haemorrhaged losses of circa $100m for the last two trading quarters of the calendar year.
CEO Matthew Maddox has claimed that increasing costs to attract customers has left them a substantial uphill battle. Considerable taxation rates and increased marketplace competitor have also served to undermine revenue taken.
However, there was seemingly cause for optimism six months ago. Enlisting the support of basketball ideal Shaquille O’Neal, WynnBet set about an ambitious spring re-launch. Such was the level of anticipation; O’Neal relinquished his minority share holding with NBA outfit Sacramento Kings. A move catalysed by a desire to remain on the right side of the league’s gambling regulations. Furthermore, Wynn Resorts had slapped a colossal $3m valuation on its app less than twelve months ago.
So why the dramatic change in fortunes? Industry insiders chart the significant slowing down of the sports wagering market as a key driver behind the app’s demise. In Spring 2021, during the height of the coronavirus pandemic and with customers turning heads towards newly established betting platforms, some gaming operators reported takings up to twenty-five times higher than initial projections. Fast forward less than a year, and this run rate has dropped to six times the estimated level amongst the market’s best performers.
Still a lucrative figure, but an increasingly saturated industry makes it much harder for new apps to thrive. Incredibly, Wynn Resorts are reportedly ready to listen to bids in the region of $500m, a sixth of the aforementioned business valuation given in 2021.
According to analysts, enticing an average American punter towards an online-gaming platform costs roughly $300-$500. It seems this price is now simply just too steep for WynnBet to accommodate.
