Wynn Interactive spin off cancelled

Wynn Resorts will no longer spin off its interactive business with a Nasdaq listing.

US.- Wynn Resorts and the SPAC Austerlitz Acquisition Corporation I have cancelled a merger that would have spun off Wynn Interactive and taken it public on the Nasdaq Stock Exchange.

Wynn Interactive CEO Craig Billings, who is soon to replace Matt Maddox as CEO of Wynn Resorts, said Wynn would pursue a new strategy for its online WynnBet brand with a lower marketing spend.

He said: “With our continued roll out of product features and planned new state launches, including New York, we remain excited about WynnBET’s future.

“As we discussed on the Wynn Resorts Limited third-quarter earnings conference call earlier this week, in light of elevated marketing and promotional spend in the sports betting industry, we are pivoting our user acquisition efforts to a more targeted ROI-focused strategy. 

“In so doing, we expect the capital intensity of the business to decline meaningfully beginning in the first quarter of 2022. WynnBET’s best days lie ahead of us.”

At the time it agreed to the deal with Austerlitz in May, Wynn said that Austerlitz’s $640m in cash reserves would help fuel growth.

The combined company would have had an estimated worth of $3.2bn, 4.5 times the revenue projected by Wynn Interactive by 2023. However, Billings said Wynn now intended to avoid the heavy marketing spend approach of its rivals.

He said: “While sports betting remains an exciting high-growth market and will potentially be a $30 billion to $40 billion total addressable market over time, the marketplace is proving to be very competitive with multiple operators deploying meaningful marketing dollars, driving high cost per acquisition, and significant customer bonus offers.

“In light of this dynamic, we are intentionally pivoting our approach to scaling, taking a more measured and long-term focus to grow healthy and sustainable business.”