WynnBET cuts losses in eight states, Mass. remains ‘unaffected’

A top official at Wynn Resorts, which owns the sportsbook running the show at Encore Boston Harbor, said last week they were cutting their losses in eight states where they had online sports wagering but planned to keep Massachusetts in their portfolio.

The industry has faced headwinds across the nation, from the rise of more restrictive laws to the need to spend massive amounts of money on marketing to compete with DraftKings and FanDuel, two of the largest online sports betting companies in the United States.

WynnBET is shrinking its online sports betting operations to areas where they have physical casinos in the United States — Las Vegas, Nevada and Boston. The company said operations in New York and Michigan “remain under review.”

The continued requirement for an “outsized marketing spend through user acquisition and promotions in online sports betting” led the company to close online sports betting and iGaming platforms in Arizona, Colorado, Indiana, Louisiana, New Jersey, Tennessee, Virginia, and West Virginia, Wynn Resorts Chief Financial Officer Julie Cameron-Doe said in a statement last week.

Operations in those markets would close “as soon as possible,” Cameron-Doe said, but the company’s holdings in Nevada and Massachusetts would “continue unaffected.”

“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,” Cameron-Doe said.

Analysts have said in the past that some wagering companies could end up ditching Massachusetts as major players like FanDuel and Boston-based DraftKings eat up large parts of the market shares.

Regulatory decisions in other states could also lead to higher costs of business in Massachusetts.

It is not a cheap proposition to run online sports betting operations, said Bill Pascrell III, a sports betting consultant with the Princeton Public Affairs Group, and more “earth-shattering” consolidations could be on the way.

“Sports betting is very different than online gaming. Mobile or retail sports betting, it’s not extraordinarily profitable. You need a lot of action, you need large handles to make some money,” he said. “When you don’t have market access, those costs are still there that everybody else has. But yet you’re not returning.”

Wynn is a “great” brand well-known for their casino and retail offerings.

“It hasn’t really moved the mark on the mobile and online world for sports betting,” Pascrell III said. “I think that’s primarily because they’re a retail company.  I think that’s why they’re keeping their stakes in Nevada and Mass.”

WynnBET was scheduled to provide a second-quarter update at a Thursday meeting of the Massachusett Gaming Commission but instead rescheduled to Sept. 7 because they had to update presentation slides related to their “goals,” a commission official said.

PointsBet, a digital betting company founded in Australia, pulled out of the running for a sports betting license in February as did Bet365 in January.

The sportsbook is one of a handful of online sports betting licensees that operates online sports betting tied to a brick-and-mortar casino in Massachusetts. They, alongside seven other online betting companies, launched to massive fanfare earlier this year after state lawmakers legalized sports betting.

Their operations, specifically marketing and promotional tactics, were quickly scrutinized by Democratic lawmakers in Massachusetts and the state’s top prosecutor. Legislative action has been floated — but not advanced so far this session — on advertising as regulatory rules took shape at the Gaming Commission

A lounge inside Encore Boston Harbor is emblazoned with the WynnBET logo and features a number of tellers and kiosks to place in-person sports bets. The sports betting lounge is just off to the side of the main casino floor.

Two companies, Bally Bet and Betway, were awarded coveted sports betting licenses not tied to brick-and-mortar casinos but have yet to launch operations in the state. Aside from DraftKings and FanDuel, Betr is also running an untethered online sports betting app that launched in May.

Massachusetts gaming regulators have collected nearly $46 million in total taxes from sports wagering operators since in-person betting began on Jan. 31 and online launched on March 10.

In a presentation prepared for the Gaming Commission, WynnBET said it brought in more than $4 million in sports wagering revenue in the first and second quarters of 2023. That amounted to nearly $800,000 in taxes for the state from a total handle of $69 million, according to figures from the company.

DraftKings said it brought in more than $93 million in sports wagering revenue during the first and second quarters of the year, according to data compiled for regulators.