Wynn Resorts, the casino operator, has announced that it will close its online sports betting and iGaming platform, WynnBET, in eight U.S. states due to a lack of clear rules and higher customer acquisition costs. The company said it will focus on those states where it has a physical presence, such as Nevada and Massachusetts, while operations in New York and Michigan are under review.
WynnBET Fails to Gain Market Share
WynnBET was launched in 2020 as a way for Wynn Resorts to tap into the growing online gambling industry in the U.S., which has seen a surge of interest amid the Covid-19 pandemic. However, the app has struggled to compete with the dominant players in the market, such as FanDuel and DraftKings, which have larger customer bases and more established brands.
According to the research firm Eilers & Krejcik Gaming LLC, WynnBET had less than 1% market share in online sports betting as of June 2021. The app was available in 10 states, including Arizona, Colorado, Indiana, Louisiana, New Jersey, Tennessee, Virginia, and West Virginia, which are now being shut down.
Wynn Resorts Cites High Marketing Costs and Regulatory Uncertainty
In a statement, Wynn Resorts said that the decision to close WynnBET in certain jurisdictions was driven by the need to deploy capital more efficiently for its shareholders. The company cited the high marketing spend required to acquire and retain online sports betting customers, as well as the lack of iGaming legislation in many states.
iGaming refers to online casino games such as slots, blackjack, and roulette, which can generate higher margins and more stable revenues than sports betting. However, only six states currently allow iGaming, while 32 states have legalized sports betting in some form.
Wynn Resorts also said that it faced regulatory uncertainty in some of the markets where it operated WynnBET. For example, in Arizona, the state’s gaming regulator recently issued a cease-and-desist order to several online sportsbooks, including WynnBET, for allegedly violating state law by offering free bets and bonuses to customers before receiving final approval.
Wynn Resorts to Focus on Physical Presence and Other Opportunities
Wynn Resorts said that it will continue to operate WynnBET in Nevada and Massachusetts, where it owns and operates casinos. The company also said that it will review its operations in New York and Michigan, where it has partnerships with local tribes.
The company said that it believes in the long-term prospects of iGaming, but that it has numerous other investment opportunities available to it around the globe. Wynn Resorts is known for its luxury properties in Las Vegas and Macau, where it generates most of its revenue. The company is also developing a resort in Japan, where it hopes to win a license for a casino.
Wynn Resorts is not the first company to pull back from the online gambling market in the U.S. Last month, Fox Corp. said it was closing Fox Bet, a partnership with FanDuel-owner Flutter Entertainment Plc. Last year, MaximBet, a collaboration between a gaming company and a men’s magazine, shut down, as did a sportsbook launched by the streaming service FuboTV Inc.