A third online Arizona sports betting operator will shutter its operations in the state, as WynnBET announced its closure Friday.
In a press release Friday, Wynn Resorts Chief Financial Officer Julie Cameron-Doe attributed the company’s decision to shut down its WynnBET platform in all but two states to the increased cost of advertising and a number of other financial factors.
“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,” Cameron-Doe said in the press release.
WynnBET will continue operations as normal in Nevada and Massachusetts, the release said, while the operator is still evaluating whether or not to shut down business in Michigan and New York.
Since Arizona betting apps launched in Sept. 2021 with 18 operators, WynnBET joins TwinSpires Sportsbook and Fubo Sportsbook as the third to close
When asked by BetArizona.com about its next steps in Arizona and what impact the operator’s closure would have on WynnBET’s partner the San Carlos Apache Tribe, a representative from the company said: “We will work with regulators and our partners in Arizona to an orderly closure.”
The company declined to comment further.
A representative from the Arizona Department of Gaming told BetArizona.com they are aware of WynnBET’s closure announcement, but had no further comment.
Requests for comment were not returned by multiple representatives from the San Carlos Apache Tribe.
Arizona Has Three Open Betting Licenses
The closure of WynnBET Arizona could potentially open a fourth online sports betting license in the state. The ADG is currently seeking applicants for one tribal license and two professional sports team licenses. The application process closes Aug. 15.
When TwinSpires shutdown in Arizona in July 2022, the Tonto Apache Tribe kept its online and retail sportsbooks operating with backend technology from TwinSpires owner Churchill Downs.
Fubo Sportsbook, on the other hand, completely shut down their online sports betting operation nationwide last October, leaving the company’s tribal partner, the Ak-Chin Indian Community, without an online wagering partner.
It is believed the license previously held by the Ak-Chin Indian Community is among the three currently up for bid by the ADG, though tribal representatives and the ADG have declined to comment on the matter.
The Ak-Chin Harrah’s Casino has a Caesars Sportsbook Arizona retail location.
The other two online sports betting licenses up for bid are the professional sports team licenses not awarded by the ADG in 2021, which would bring the state to its full allotment of 10 should the department find two qualified candidates.
In an email to WynnBET customers sent out Friday afternoon, the operator said they’d allow users to settle their bets and withdraw account balances for up to 60 days, with all promotions coming to an end immediately.
“We want to thank you for being a dedicated customer of WynnBET,” the email read. “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 sports books.”
What Industry Experts Say About WynnBET’s Exit
Daniel McIntosh, who serves as a teaching associate professor at Arizona State University, told BetArizona.com we’re in the middle of a round of consolidation with U.S. sports betting operators.
Given such a dynamic market environment, McIntosh believes operators like WynnBET that have failed to gain a foothold in name recognition and market share will continue to flounder in the near-distant future.
“Consolidation and defending market share is the name of the game,” McIntosh told BetArizona.com. “I haven't done a deep dive on it yet, but I'm also fascinated by ESPN entering the market with [PENN Interactive].
“PENN’s deal with [Barstool Sports] and the separation there was interesting from a number of perspectives. ESPN is truly a media company and their partnership with PENN Interactive potentially gives them advantages in terms of distribution. We've seen mobile, we've seen brick and mortar, and now potentially we are seeing linear-streaming.
“Wynn was unable to find a foothold in any of those three channels.”
In the latest monthly revenue report from the ADG, WynnBET had the seventh biggest May handle out of 17 operators in the state. Wynn reported $3.96 million in handle, compared to $162 million for market leader FanDuel Arizona.
Six operators had less than $650,000 in handle in May in Arizona, while FanDuel and DraftKings both had more than $10 million in gross revenue for the month.
Brendan Bussmann, who serves as the managing partner at B Global Advisors, told BetArizona.com that WynnBET’s decision isn't a surprise given the competitive nature of the state’s wagering scene.
Bussmann believes states like Arizona, which have lots of operator options, will continue to see further consolidation.
“As Arizona continues to look for new market entrants, the dynamics of the market keep changing with another departure,” Bussmann said. “This continues to emphasize how sports betting continues to offer low margins in a high-volume business. With competition in the teens in terms of number of players, it is hard beyond the top spenders in the market to break through. In the end, this comes down to economics.
“Arizona’s market continues to remain competitive by offering different dynamics than others because of its split between tribes and sports teams. There will continue to be changes in the market as brands shift strategy to meet their customer base."