Wynn Resorts Reports Strong Q1 and Points to Potentially Bigger Q2

The rash of earnings reports for legal sports betting providers in the US continued Tuesday with Wynn Resorts revealing their Q1 financials and announcing a positive new direction for the company. Wynn Resorts is just one of a host of sports betting companies looking to "up their game" and take advantage of the legal sports betting gold rush currently happening in the US market.

Along with some surprisingly strong Q1 earnings for Wynn Resorts comes news of a move to become a publicly traded company, in similar style to top-tier providers like Golden Nugget Online Gambling Inc., one of the two DFS giants, and Rush Street Interactive, among others. Blank-check company Austerlitz Acquisition Corp. I. is the entity that will be aligned with Wynn in their attempts to trade their stocks on Nasdaq, hopefully by the end of the year.

What Wynn Brings to the Table

Wynn Resorts is a somewhat recognizable name within the legal sports betting industry but has accelerated their vision and exposure the last six months in particular.

Wynn has grown its brand from one legal sports betting jurisdiction in November 2020 to six at the present time, including Heavyweight jurisdictions New Jersey, Colorado, Virginia, Indiana, Tennessee and Michigan. Wynn has worked hard to gain market access in nine other states across the nation.

As it stands, Wynn Resorts' Rewards program has been able to set the company apart and boasts a database of 13 million users, which the company hopes to flip to their betting brand for a fraction of the typical cost of customer acquisition.

Wynn has also reported an average annual return (AAR) of $103 million and gross gaming revenues nationwide for the last 12 months of $36 million.

What Wynn Generated in q1 of This Year

Wynn Resorts had a pretty good start to their fiscal 2021 as evidenced by their financial disclosures on the same call that included their SPAC announcement.

Revenues actually slid year-over-year but that could be due in large part to acquisitions and expansion the company experienced the past 12 months and the COVID affect on their brick-and-mortar facilities. Revenues were reported at $725.8 million for the first quarter of 2021, down 23.9%, or $227.9 million year-over-year from the $953.7 million.

Net losses were more positive for Wynn. They came in at $281 million for Q1, which represents a year-over-year drop from $402 million over the same period last year. There was a quarterly loss of $2.41 per share versus the Zacks Consensus Estimate of a loss of $2. That's actually an improvement from the $3.54 per share loss the company experienced last year at this time.

About That Spac Deal

There has been a trend lately of sports betting brands taking their products public in order to not only increase their exposure but to generate cash flow, mostly for future expansion.

SPACs (special purpose acquisition companies) act as the vehicle to just that and Austerlitz Acquisition Corp. I, headed by billionaire investor and Vegas Golden Knights owner Bill Foley recently gained the honor of turning Wynn into a publicly traded entity.

Wynn Resorts CEO Matt Maddox said of the deal: “We are [also] pleased to announce our intention to fuel the growth of WynnBET through a merger of Wynn Interactive with Austerlitz Acquisition Corp I. We are proud to join forces with Bill Foley as we continue to aggressively scale in online sports betting and igaming. With WynnBET now live in six states, we will be launching enhanced product features and expanding our market position in 2021.”

Estimates are that the merger of the two companies will create a new venture worth in the $3.2 billion range. Wynn Resorts will get to keep 58% of a merged brand that hopes to challenge some of the bigger names in the ever-growing US legal sports betting landscape.

“Wynn Interactive is rapidly establishing a leadership position in what will ultimately be a $45 billion North American online sports betting and iGaming market through our relentless focus on product features, user experience and customer service,” according to Wynn Interactive President and Executive Director Craig Billings.

Headed in the Right Direction

Wynn Resorts appears to be on the right track in regard to their desire to raise their profile within the US legal sports betting industry. Becoming a publicly traded company will certainly help as will recent deals with the Memphis Grizzlies, the Detroit Pistons and with NASCAR.

The US legal sports betting space is definitely getting to a saturation point but so far, the US market has proven that there is enough to go around. Q2 will be a tell-tale sign of Wynn's expansion success. Stay tuned.