Wynn Resorts has announced that pulling its sportsbook WynnBET out of two-thirds of the states in which it operates.
“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 Julie Cameron-Doe, Chief Financial Officer of Wynn Resorts, in a Friday press release.
Wynn likely thought it would have an advantage as sports betting expanded in the US, as it has been an established player in the casino business, but it is the two daily fantasy giants, FanDuel and DraftKings, that have dominated the market. Combined, they own around 75% of the market, give or take.
The rest of the competition is just fighting for scraps, though BetMGM and Caesars appear to be the two that have been firmly entrenched behind the big boys.
According to Legal Sports Report, WynnBet has less than a 1% market share in the states above where that sort of operator data is reported.
While one would assume that Wynn Resorts has been mulling this move for some time, the announcement last week that Penn Entertainment and ESPN have teamed up for ESPN Bet could have nudged the company over the edge.
WynnBET will close up shop in Arizona, Colorado, Indiana, Louisiana, New Jersey, Tennessee, Virginia, and West Virginia “as soon as possible.” Operations in Nevada and Massachusetts, where the company has brick-and-mortar casinos, will continue. Up in the air are Michigan and New York, which are still being evaluated.
Legal Sports Report says that WynnBET has 3.7% of handle market share in Massachusetts. It’s iGaming revenue in Michigan is 3.2% of the state’s total year-to-date, good for middle of the pack out of 15 operators. Its sports betting handle market share is basically non-existent in New York when compared to its competitors.
“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,” added Cameron-Doe.
Sports betting looked like it could be a gold rush once PASPA was overturned a few years ago, but it seems like it will just be dominated by two to five companies eventually (or now, really). WynnBET isn’t the only online sportsbook to realize it wasn’t working. Fubo Sportsbook, MaximBet, TwinSpires, and most recently, Fox Bet, have all shut down.