The sports betting and iGaming brand, WynnBet, has announced its decision to wind down operations in several states across the US. This comes at a time when the brand was due to rollout its new gambling app, but apparently operating costs and the marketing spend has meant that WynnBet will have to roll back its operations instead.
WynnBet’s parent company, Wynn Resorts, made its announcement on Friday that its online operations would be closed down in eight states as soon as possible. This means the end of WynnBet operating in the following states:
However, the brand is planning to continue its WynnBet operations in the states of Nevada and Massachusetts where it operates its physical casino resorts.
WynnBet’s chief financial officer, Julie Cameron-Doe said that, ‘outsized marketing spend through user acquisition and promotions in online sports betting,’ was part of the reason behind the brand’s sudden shift in direction.
While the cost of introducing its betting platform to new states has hit WynnBet hard, the brand signals that it still believes in its long-term future in the iGaming realm. Cameron-Doe noted that there was the, ‘presence of numerous other investment opportunities available to us around the globe.’
This means that WynnBet will now aim to focus on the states where it has a physical presence. These should include Michigan where WynnBet accounts for over 3% of the iGaming revenue so far in 2023. Additionally, WynnBet has created around $50 million in iGaming revenues over the past two years.
The Wynn brand spent $80 million investing in BetBull in 2018 to create its Wynn Interactive division. This was expected to go public in 2021, but the listing failed to go through.
Despite this, the brand continued to spend a lot on its sports betting platform in advance of the 2021 NFL season. However, these efforts failed to produce the expected revenues and WynnBet significantly drew back on its marketing spend.
Since then, WynnBet has seen its market share eclipsed by rival brands such as FanDuel and DraftKings, while the likes of BetMGM have also clearly seized the new ground in the sports betting realm. As such, it has been clear that WynnBet was caught in a situation where it had to invest heavily to stay up with its competitors, but such a plan was fraught with risk.
As a result, it seems that WynnBet’s ambitious plans have failed to succeed and now the brand is about to undergo an embarrassing scaling back of its sports betting platform.
What makes this move all the more remarkable is the fact that WynnBet had recently gone on the offensive with the announcement that it would be introducing a new app in six states. Plus it had hinted that it might be ready to enter the newly legalized Kentucky sports betting market.
WynnBet is just one of many online sportsbooks who have hit hard times in recent years. Several sportsbooks such as Fubo Sportsbook, MaximBet, TwinSpires and most recently Fox Bet have had to wind down operations in the face of tough market conditions.
Plus, the Australian sports betting brand, PointsBet has had to sell its US operations due to its inability to gain a toe-hold in the competitive sports betting domain.
Earlier this week, Penn Entertainment shocked the industry with the announcement that it would be seeking to partner up with ESPN rather than seeking to consolidate its relationship with Barstool Sportsbook.
Now it looks like WynnBet is in the midst of scaling back its operations, and it remains to be seen whether it will ever return to its previous ambitions of hosting a top-tier sports betting platform.
So while more and more states are legalizing sports betting, this hasn’t made it any easier for operators to make their online sportsbook business any more viable.
The announcement from WynnBet was only made at the end of last week, and it suggests that the online sports betting and iGaming markets in the US are getting more competitive than ever before. WynnBet is just one of many sportsbooks who have hit hard times recently and it’s clear that there could be many more casualties in the US sports betting scene ahead.
The fact that WynnBet hinted at a bid to spread its operations overseas suggests that the brand could be pursuing long-term goals rather than short-term gains in its online operations. Whatever happens, it’s a dark day for one of the most popular betting brands in the US.
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