Just as the online sports betting business is taking big blows from competitors and the government concurrently, Wynn Resorts has announced its decision to sell its online sports betting establishment, WynnBet. The information comes amidst a situation of emergency in the betting industry that demands expensive methods of promotion and brings heavy taxation policies from the government. After incurring the loss of nearly 3 billion dollars in just a year since its launch, WynnBet is all parcelled up with a $500 million price tag.
Less than a year ago, Wynn Resorts surprised the entire betting industry when it announced its ideas to venture into the online betting business with the WynnBet. With the former NBA star Shaquille O’Neal leading the wagon, the app was thought to become a big name in the business. Shaquille was even reported to have sold his minority share in Sacramento Kings to not break the NBA policies regarding sports betting. To read more about the benefits and strategies of playing at Crypto sports betting sites, go now to this article.
But just over six months in operation, WynnBet was finally ramming against the wall, being unable to sustain a business amidst several alarming factors. As per the reports, Wynn was about to sign a merger with Austerlitz Acquisition Corp., owned by the billionaire and the owner of Las Vegas Knights, Bill Foley. This deal would have hiked the value of Wyn Bet to 640 million dollars in addition to creating a public company worth $3.2 billion. However, the deal did not take place as the outgoing CEO did not seem interested in it.
The CEO said on the 10th of November that the current betting environment is not supportive of the business. Because the promotional strategies are getting more expensive each day, adding to the already hefty taxation of around 51%. The major betting facilitators like FanDuel and DraftKings are offering as much as 1000 dollars for initial registration. Caesar’s staged something similar in New York despite the crushing and disproportionate taxation policies. These numbers are alarming when it comes to business, so CEO Maddox announced that it is healthier for WynnBet to shy away from the business.
The whopping 600 million dollars bet accumulation last Friday on FanDuel, DraftKings, and Caesar’s owes everything to the promotional strategies. Even Analysts are surprised that this platform would spend such a large sum on promotions alone. According to Barry Jonas, an analyst from Truist, the taxation has to come down if the state hopes for any long-term profit. WynnBet currently does not have any operations in New York despite being licensed.
The industry currently is not as profitable as it was during the second quarter of 2021. It then showed the potential to increase 25 times what is projected. Now it would be a surprise if the largest of platforms posted a 6x revenue. In the share market, DraftKing, which was soaring higher than $50, had to close the market valued at $19.46. With $300-$500 on average to acquire a customer, it is highly doubtful that many names would be able to sustain the market.
WynnBet was valued at 700 million dollars by analysts from Morgan Stanley during November 2021. With a current price tag of $500 million, we can see how competitive it is for even a reputed firm to establish a long-term share value. The regressive tax policies are also a reason for people moving towards cryptocurrencies.