According to a source familiar with the matter, Wynn is selling WynnBET's online gaming app operator. The unit was originally valued at around $3 billion a year ago. Wynn has now reduced the price to $500 million. This comes only six months after the company brought on Shaquille O'Neal as its official ambassador, and ahead of a spring launch.
Wynn Resorts announced in November 2021 that it had abandoned previously announced plans to merge Wynn Interactive with Austerlitz Acquisition Corp, a blank-check company owned by Bill Foley. WynnBET would have been able to create a public company with a market capitalization of approximately $3.2 billion.
WynnBET would also have received $640 million in marketing funds. Matt Maddox, then-CEO, stated that he wasn't interested in spending money to acquire an asset that was not sustainable.
Analysts from Morgan Stanley soon revealed that WynnBET was valued at $700 million. The analysts also agreed that WynnBET would win 2.5% of the North American sports betting market.
Two of the largest esports and sports betting companies in the country, DraftKings and FanDuel, have been running aggressive marketing campaigns to attract new customers. Caesars Entertainment also has an aggressive promotion strategy in New York, despite the fact that it is subject to a 51% tax on online gaming revenues.
The New York Gaming Commission announced that mobile betting on sports had made a strong start to its first week. More than $600 million was placed by DraftKings and FanDuel, as well as Caesars Entertainment and BetRivers. Gaming experts believe that the rapid takeoff was partly due to the extensive promotion by local gambling operators.
Wynn Resorts already has an operating license for online sports betting in New York, but has yet to roll out its service.
Online sports betting companies traded at 25x their projected revenues in spring 2021. This was because many investors were keen to get a piece of their stock due to the projections that the COVID-19 pandemic would cause a boom in mobile gaming. They fell to lower trading prices within six months for the sports betting companies.
A Wynn Resorts spokesperson said that the company would not comment on "market speculation" or "rumors." He stated that Wynn Resorts had made it clear that they wanted to run the business in a way that creates shareholder value over the long-term.
People familiar with the situation indicated that Penn Interactive and Fanatics are the most likely suitors to Wynn Interactive's acquisition. However, neither of these companies has yet expressed any interest in the assets.