In a surprising turnaround, Wynn Resorts decided to sell its fledgling sports betting business, WynnBet. Instead, the casino company will work to introduce its core business to the Middle East. On Tuesday, Wynn signed a deal with the United Arab Emirates (UAE) to build a resort with a gaming area.
There will be a day when US sports betting is a profitable business, but that may take a couple of years to arrive. The promotional costs associated with customer acquisition are daunting and, apparently, Wynn Resorts decided sports betting profits aren’t worth the wait.
Wynn to sell sports betting biz for a song
From the onset, Wynn Resorts and sports betting didn’t seem a good match. For instance, the casino company never even launched WynnBet in Las Vegas, its home turf.
Last May, Wynn announced it was merging WynnBet with Austerlitz Acquisition Company. The deal would leave Wynn with 58% of WynnBet and provide roughly $640 million to invest in the venture. Six months later, however, that deal collapsed.
When the merger was first announced, Wynn’s interactive businesses were valued at roughly $3.2 billion. The value of US sportsbooks has dropped since then, now that the promotional costs are better understood. For example, WynnBet expected to lose $100 million in both the third and fourth quarters, and Wynn’s outgoing CEO Matt Maddox wasn’t looking forward to losing more.
“The market is really not sustainable right now,” Maddox said in November. “Competitors are spending too much to get customers. And the economics are just not something that we’re going to participate in.”
Still, it surprised analysts to hear that Wynn is now looking to sell off its interactive division at a deep discount. According to the New York Post, Wynn is now looking to sell WynnBet for just $500 million.
What will gaming look like in the UAE?
Instead of fighting for market share in the US sports betting business, Wynn has decided to expand its resort business. This week, Wynn announced that it signed a deal to build a resort in the emirate of Ras Al Khaimah (RAK).
While tourism is a key sector in RAK, the Muslim state still forbids gambling. That may soon change, however, and as part of Wynn’s agreement, RAK is forming a new regulatory body that will ensure “the responsible practice of recreational gaming at all levels.”
Wynn’s UAE resort will open its 1,000-room resort in 2026. It will feature retail shopping,10 restaurants and lounges, a spa, a convention center, and what may be the first “gaming area” in the UAE.