Wynn Resorts is reportedly looking to sell its online sports betting product at a big discount. The reason why the Vegas-based gaming giant is willing to unload its sportsbook business at a lower price than expected is that the business has been suffering losses from high taxes.
According to the New York Post, WynnBet could be willing to sell its online gaming app for as little as $500 million. The reason the number seems shockingly low is that the product was valued at roughly $3 billion just six months earlier.
Another reason to be surprised by the company’s decision to put the mobile betting product up for sale is that WynnBet recently signed sponsorship deals with Ben Affleck and Shaquille O’Neal. The two are supposed to be brand ambassadors for the WynnBet Sportsbook.
Wynn Still hasn’t Launched Its Online Sportsbook in New York
WynnBet was one of the nine sportsbook brands that got the operating license from New York State. However, this sportsbook still hasn’t launched its service in the Empire State.
The four sportsbooks that went live in New York on January 8, 2022, have already made significant success. Within just eight days, the four operators received a total of over $600 million in wagers, generating a revenue of nearly $30 million between them.
The problem is that gaming tax rates in New York are higher than in other US states. New York sportsbooks have to give 51% of their revenue to the state, which is to be used for education, youth projects, and for fighting addiction.
For WynnBet, the tax rate might be too high. This goes especially for the fact that its NY competitors have started going heavy on the promotions. For instance, Caesars Sportsbook was giving away as much as $1,000 in bonuses to its customers in the first week of mobile betting in New York.
To get enough players to make their NY business profitable, WynnBet would probably have to invest a lot of money in promoting the sportsbook. According to David Katz, a Jefferies gaming analyst, it costs about $500 to acquire an online sportsbook user.
Wynn might not be willing to pay as much. Instead, a much simpler solution for the company would be to sell its betting product to someone else. The good news for them is that there are plenty of suitors out there. Some of the companies rumored to be interested in purchasing the business include Penn Interactive, Fanatics, and BetBull.