Some operators are taking the “go big” approach in terms of advertising and marketing spending – while WynnBET instead went with the “or go home” part of the common phrase.
Specifically, WynnBET last month announced it was exiting the Arizona sports betting market as well as those in Colorado, New Jersey, Tennessee, Virginia, West Virginia, Indiana, and Louisiana.
That leaves – for now – only four states with WynnBET sportsbooks: New York, Michigan, Nevada, and Massachusetts. The New York and Michigan markets, WynnBET officials added, are being “evaluated.”
In Arizona, WynnBET in June took in $3.6 million of the $390.3 million in wagers for the state’s mobile sports betting industry. That handle – less than 1% of the industry total – ranked just eighth-best in the state, behind the usual runaway leaders FanDuel and DraftKings but also behind midsize operators MGM and Caesars as well as Barstool, Desert Diamond, and Hard Rock sportsbooks.
WynnBET revenue for the month was just $4,800 – hardly worth the time and effort of company officials, as it was the lowest total of the 17 Arizona sportsbooks in operation in June.
For the first half of 2023, WynnBET placed 8th in handle each month except for settling for 9th in April and May, according to a report from Arizona’s regulators.
The TwinSpires and Fubo sportsbooks preceded WynnBET in shutting down operations in Arizona, which debuted legal sports betting two years ago this month.
The Real Reason for WynnBET’s Pullback from U.S. Gambling
Julie Cameron-Doe, Wynn Resorts’ chief financial officer, said in a statement about the company’s pivot:
“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.”
But she added another element that is often overlooked in the overall picture of the expansion of legal, regulated gambling in the U.S.
“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.”
The eagerness of lawmakers to embrace sports betting – three dozen states have legalized it since a landmark ruling by the U.S. Supreme Court in May 2018 paved the way – has been almost matched by their reluctance to do the same when it comes to online casino play.
Both forms of gambling have proven quite lucrative for illegal, offshore internet operators, but only sports betting now faces a widespread legal counterpart that provides effective consumer protection.
Only eight states – New Jersey, Nevada, Michigan, Pennsylvania, Delaware, Connecticut, West Virginia, and Rhode Island – allow online casino gambling, and that includes only online poker in Nevada.
That’s in spite of the fact that states with robust competitive markets, such as New Jersey, Michigan, and Pennsylvania, collect far more in taxes annually from online casinos compared to sports betting.
In the first half of 2023, for example, New Jersey took in $139.6 million in taxes from online casino gaming revenue compared to $55 million from mobile sports betting.
So if lawmakers are looking to add a new tax source that is worth tens of millions or even hundreds of millions of dollars annually, online casino legalization would seem to be a simple option.
And for a company with the worldwide breadth of Wynn, stepping aside until the tide finally turns in favor of online casino gaming expansion in the U.S. appears to be a prudent course of action.
The WynnBET decision in Arizona suggests that a step taken by the state’s lottery division in June to introduce a “Lucky Lounge” platform was not enough to convince Wynn decision-makers that online casino play would follow anytime soon.
Lucky Lounge players use tokens for one of four digital games that give them a chance to win money – arguably a tiptoe by the state toward online casino legalization.
Details on WynnBET’s Arizona Exit
Those customers who inquired about the company’s stats in the state received the following email:
“We want to thank you for being a dedicated customer of WynnBET. Unfortunately, we have had to make the difficult decision to close down the business in most states, including Arizona. We have enjoyed serving you and look forward to serving you at Wynn Las Vegas and Encore at Wynn Las Vegas and Encore Boston Harbor and their sportsbooks.”
WynnBET customers will be able to access their account until Oct. 11 to withdraw funds. For those who do not close accounts by then, a check will be mailed to the address listed on the account.
Still to be clarified is how the company will handle “future bets” such as a fan who this summer placed a wager on the Arizona Cardinals to go “over” or “under” their meager projected win total of 3 1/2 wins out of 17 games.
That would also apply to any wagers made – if any were made – on whether the Cardinals will win the Super Bowl. Those odds on DraftKings on the eve of the start of the regular season were 400-1, or double the odds of the perceived second-worst NFL team, the Houston Texans.