- Wynn Resorts had planned to go public via a SPAC.
- This plan is now cancelled, a deal that was worth up to $3.2 billion.
- Wynn will focus on more sustainable methods of user acquisition.
LAS VEGAS - Wynn Resorts’ attempt to go public via a special purpose acquisition company (SPAC) has been terminated. Wynn, one of the top online sports betting and gambling companies in the world, was set to merge with a shell company, Austerlitz, controlled by Las Vegas Golden Knights owner Bill Foley.
The deal, potentially worth $3.2 billion, has been called off after further analysis of the underlying economics revealed problems with the plan.
““The market is really not sustainable right now,” said Wynn CEO Matt Maddox. “Competitors are spending too much to get customers. The economics are just not something that we’re going to participate in in the short term.”
Wynn CEO Replaced Nearly Immediately
Maddox announced his planned departure from the company just before the earnings call at which he gave that statement.
Billings issued his own statement on the matter, referencing Maddox’s statement on the call, and discussing what the future could hold for Wynn without the SPAC.
“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,” said new CEO Craig Billings in a statement. “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.”
The merger would have left Wynn Resorts with control of 58% of the new company, but it seems the online gambling market just wasn’t to their liking.
We’ll see what the future holds for this company, which could go anywhere from here, although Billings’ statement suggests a more stable approach going forward. The SPAC market has been volatile in recent months, and it makes sense that a company looking for stability would look elsewhere.
As any gambler would know, you got to know when to hold 'em - and know when to fold ‘em.