Wynn Casino Resort. Photo by Anthony WALLACE / AFP
The numerous earnings reports for legal sports betting providers in the US continued on Tuesday. Wynn Resorts released its first quarter financials and announced a positive new direction for the company. Wynn Resorts is just one of many sports betting companies looking to improve their game and take advantage of the gold rush currently raging in the US market in legal sports betting.
Along with some surprisingly strong Q1 earnings for Wynn Resorts, there’s news of a move to become a publicly traded company, similar to top tier players like Golden Nugget Online Gambling Inc., one of two DFS giants, and Rush Street Interactive. among other. The blank check company Austerlitz Acquisition Corp. I. is the company that in its attempts to trade its shares on the Nasdaq will hopefully align with Wynn by the end of the year.
What Wynn brings to the table
Wynn Resorts is a somewhat household name in the legal sports betting industry, but has accelerated its vision and notoriety, particularly in the past six months.
Wynn expanded its brand from one legal sports betting jurisdiction in November 2020 to the current six, including the heavyweight jurisdictions of New Jersey, Colorado, Virginia, Indiana, Tennessee, and Michigan. Wynn has worked hard to gain market access in nine other states in the country.
Currently, Wynn Resorts rewards program sets the company apart and has a database of 13 million users whom the company is looking to switch to its betting brand at a fraction of the typical cost of customer acquisition.
Wynn has reported an AAR of $ 103 million for the past 12 months and gross gaming revenue of $ 36 million over the past 12 months.
What Wynn generated in the first quarter of this year
Wynn Resorts got off to a pretty good start to fiscal 2021, as evidenced by financial statements on the same call that included the SPAC announcement.
Revenues actually fell year over year, but this could be in large part due to acquisitions and expansion the company has seen over the past 12 months and the impact of COVID on its stationary facilities. Revenue for the first quarter of 2021 was $ 725.8 million, a decrease of 23.9% or $ 227.9 million from $ 953.7 million year over year.
The net losses were more positive for Wynn. They were $ 281 million for the first quarter, a decrease of $ 402 million year over year. There was a quarterly loss of $ 2.41 per share versus the Zacks Consensus estimate of a loss of $ 2. This is actually an improvement on the $ 3.54 per share loss the company posted at the time last year.
About this Spac Deal
Recently, there has been a trend for sports betting brands to go public with their products not only to increase their exposure but also to generate cash flow, mostly for future expansion.
SPACs (Special Purpose Acquisition Companies) act as vehicles for just that, and Austerlitz Acquisition Corp. I, led by billionaire Vegas Golden Knights owner Bill Foley, recently received the honor of transforming Wynn into a publicly traded company.
Commenting on the deal, Matt Maddox, CEO of Wynn Resorts, “It’s us [also] We are pleased to announce our intention to grow WynnBET through the merger of Wynn Interactive with Austerlitz Acquisition Corp I. We are proud to partner with Bill Foley as we continue to aggressively participate in online sports betting and igaming. With WynnBET now living in six states, we will be introducing expanded product features and expanding our market position in 2021. “
It is estimated that the combination of the two companies will create a new company valued at $ 3.2 billion. Wynn Resorts will retain 58% of a merged brand that hopes to challenge some of the bigger names in the growing US legal sports betting landscape.
“Wynn Interactive is rapidly building a leadership position in the North American online sports betting and iGaming market valued at $ 45 billion through our relentless focus on product features, user experience and customer service,” said Craig Billings, President and Executive Director of Wynn Interactive.
Headed in the right direction
Wynn Resorts appears to be on the right track with a desire to raise its profile in the U.S. legal sports betting industry. Becoming a public company will surely help as well as recent deals with the Memphis Grizzlies, Detroit Pistons, and NASCAR.
The US legal sports betting room is definitely reaching a saturation point, but so far the US market has proven that there is enough to get around. The second quarter will be a telltale sign of Wynn’s expansionary success. Stay tuned.
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