American casino operator Wynn Resorts Limited is reportedly looking to offload its Wynn Interactive Limited subsidiary for as little as $500 million only a few months after proposing to float the online sportsbetting enterprise with a $3.2 billion valuation.
According to a report from the New York Post newspaper, the Las Vegas-headquartered firm is now said to be shopping the subordinate to potential buyers at a steep discount despite the fact that the branch recently secured a New York license for its WynnBet-branded online sportsbetting service. The source detailed that the move additionally comes just six months after the arm inked a deal to make National Basketball Association (NBA) legend Shaquille O’Neal an official brand ambassador.
Wynn Resorts Limited premiered its Wynn Interactive Limited arm in November of 2020 with this division’s mobile-friendly WynnBet online sportsbetting service subsequently also going on to be granted licenses for the American states of Arizona, Colorado, Indiana, Michigan, New Jersey, Tennessee and Virginia. Despite all of this and the newspaper reported that the underling is said to be facing significant losses due to high tax rates and the provision of customer-attracting promotions.
Matt Maddox (pictured) serves as the Chief Executive Officer for Wynn Resorts Limited and he reportedly used a November conference call with investors to explain that the WynnBet service from Wynn Interactive Limited was expecting to lose up to $100 million in both the third and fourth quarters. The outgoing boss purportedly moreover pronounced that the American online sportsbetting market ‘is really not sustainable right now’ with his company now not interested in throwing good money after bad.
Maddox reportedly stated…
“Competitors are spending too much to get customers and the economics are just not something that we’re going to participate in.”
The New York Post reported that this revelation immediately prompted global brokerage and investments firm Morgan Stanley to downgrade the overall value of Wynn Interactive Limited to $700 million and forecast that its WynnBet service would likely secure only a 2.5% share of the overall North American sportsbetting scene. By contrast and the newspaper noted that the competing enterprises from DraftKings Incorporated and FanDuel Group currently control a majority share of the market and have recently been offering sign-up bonuses to new punters worth as much as $1,000.
The newspaper reported that Wynn Interactive Limited is furthermore responsible for the mobile-friendly WynnSlot.com and BetBull.com services and is now likely set to attract interest from a wide range of potential suitors including Fanatics Incorporated and Penn National Gaming Incorporated. David Katz from American brokerage Jefferies Financial Group Incorporated purportedly observed that it should come as no surprise that most American punters are claiming the promotions and taxes being offered by the nation’s online sportsbook operators despite the punishing nature of these deals at a corporate level.
Katz reportedly told the New York Post…
“The operators are constantly telling us they have the mathematical models that give them the intelligence that they are spending money wisely but Wall Street doesn’t believe them. The way Wall Street sees the future has changed in the last three to six months and there was certainly a lot of enthusiasm but the winds changed swiftly.”