On Sunday, the New York Post reported that Wynn Resorts has started looking into selling its online sports betting arm, with an asking price of $500 million.
Wynn, using its WynnBet brand, stands as one of nine licensed online sports betting operators in New York, but its launch date remains TBD. So how would this news affect the future of WynnBet in the Empire State?
PlayNY asked two industry experts what they expected as far as Wynn’s future was concerned.
Both speculated that a deal with Penn National/Barstool Sports was a logical path forward.
Could Barstool replace WynnBet in NY sports betting industry?
Penn National/Barstool Sports was left out of the New York market. However, the tandem could find its way back in under this scenario. Penn National acquired theScore for $2 billion during the fall, though. So it’s unclear if the parent company would be willing to make another massive acquisition.
“If the license is transferable to the new owners, then it may increase the potential value of Wynn,” one of the experts opined.
Fanatics — under the direction of Michael Rubin and former FanDuel CEO Matt King — and Bet365 (whose bid just fell short in NY) would conceivably be other logical candidates for a pact, the experts added.
Does Barstool want to join NY sports betting market?
Bartstool’s Dave Portnoy has not shied from voicing his opinion on New York’s massive 51% tax rate after regulators left his company out of the mix.
“Nobody is going to make money,” said Portnoy, who later conceded during his Barstool show that he would’ve rather been in NY than left out. “These companies that are already getting smashed and bleeding money are going to get killed in New York City. They’re going to have to spend millions, billions to compete, and they’re going to have to give all their profits away.”
Through the first nine days of being live (Jan. 8-16), NY online sportsbooks (FanDuel, DraftKings, Caesars, BetRivers) took a staggering $600 million in bets, leading to combined taxes of nearly $25 million. BetMGM also launched Jan. 17, and PointsBet is close to launch itself.
Portnoy also took to Twitter to opine on the NY Post’s Wynn report Monday.
Hmm $wynn selling its online sports betting business? They can’t compete cause competitors spending too much to acquire customers? Business model not sustainable. Hmm…it’s almost like $penn is only company that figured it out. This is going exactly how I predicted. pic.twitter.com/fS8TtIS08e
— Dave Portnoy (@stoolpresidente) January 24, 2022
Could WynnBet launch NY betting app anyway?
Experts who spoke with PlayNY wondered whether Wynn Sportsbook NY would end up launching, for example, before the Super Bowl, as hoped for by policymakers. “It could make sense to leave it up to the next owner,” one expert said.
Wynn did announce that it plans to launch in NY in Q1 2022. “Pending regulatory approval, we will also soon be launching our online sportsbook in New York …” Wynn president Ian Williams said in a statement.
Of the New York Post report, Wynn reiterated:
“We were clear on our last earnings call about the current highly competitive nature of the online sports betting market and our desire to operate that business in way that will actually create long-term shareholder value.”
It is going to be difficult for smaller operators to be able to thrive in a competitive environment like New York given all the titans who possess more significant budgets for ads and promos.
“The market is really not sustainable right now. Competitors are spending too much to get customers. And the economics are just not something that we’re going to participate in,” former Wynn CEO Matt Maddox said. “We are focused on building a long-term business that’s sustainable, that is not losing lots and lots of money. So we are shifting our strategy to think about the long term, and think about cash preservation.”
Added an expert who spoke with PlayNY:
“I think all these companies lose money on sports, and it’s hard to compete with the companies willing to lose big for market share.”