Wynn Resorts Unlikely to Unload iGaming, Sports Betting Biz, Says Analyst

The sports betting equities landscape painting was rattled yesterday. That’s after reports surfaced on Lord's Day that Wynn Resorts (NASDAQ:WYNN) is contemplating marketing its Wynn Interactive unit at the deep discounted price of $500 million. At least 1 analyst doesn’t see that happening.

The New House of York Post originally reported the speculation. But the gaming operator hasn’t publicly remarked because it doesn’t comment on securities industry rumors. Morningstar psychoanalyst Dan Wasiolek believes it’s unlikely the casino companionship parts with its iGaming and sports wagering arm, especially at a rock-bottom price.

Sources cited in a Jan. 24, 2021, New House of York Post clause lay claim narrow-moat Wynn is looking to sell its WynnBet online sports betting concern for around $500 million, which we view as a bruit and unlikely to live the case,” he said inwards a note.

The speculated $500 trillion cost tag floated inwards the Post article appears 9 months after Wynn reached an agreement with special purpose acquisition companionship (SPAC) Austerlitz Acquisition Corp. i (NYSE:AUS) to convey Wynn Interactive public at a $3.2 1000000000 valuation.

“Therefore, the rumored $500 gazillion toll tag for WynnBet strikes us as low, and compares with the around $3 billion valuation the accompany and its prior partner, Austerlitz, exercise set a yr ago,” adds Wasiolek.

Sports Betting Opportunity Remains

One thing Wynn antecedently confirmed regarding sports wagering is that it’s unwilling to participate in the industry’s currently unfavourable economics.

Translation: Wynn won’t stick to the template set out by some competitors, which consists of overgenerous promotions and in high spirits marketing disbursal to appeal customers, because there’s minuscule evidence to intimate that approaching leads to profitability. In this environment, that’s potential a prudent approach, and it doesn’t mean the structured resort manipulator is looking for to jettison its digital gaming arm.

“While Wynn’s near-term de-emphasis on WynnBet investment might make us to bring down our near-term revenue forecast for the business, we noneffervescent see to it the division representing a low-double-digit percent of its tote up revenue by the midsection component of this decennium (around $1 billion inwards total sales),” notes Wasiolek.

The psychoanalyst adds domestic iGaming and sports wagering remains “a multi-billion revenue opportunity” that could generate double-digit earnings before interest, taxes, depreciation and amortization (EBITDA) margins for operators by the midsection of this decade, assuming stream levels of unconscionable marketing spending normalize.

Other Signs Wynn Interactive May Not Be for Sale

If Wynn Interactive is for sale, the parent companionship isn’t performing the like it. For example, Wynn issued a financial statement before today, expression it’s starting pre-registration for the WynnBET app in LA in anticipation of roving sports betting launching at that place inwards the coming days.

Additionally, Wynn Interactive is ready and waiting(p) on net approval from the New York Gaming Commission to set in motion inward that state.

Early information paint a picture New House of York is fountainhead on its right smart to decorous the US leader inwards nomadic sports betting, indicating Wynn may not require to live headlong in abandoning its digital gaming unit before testing the waters in that state.