Wynn Resorts Abandons Online Gambling SPAC. Should Investors Worry?
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Wynn Resorts is a high-end casino company with operations in Las Vegas, Boston and Macao. The company announced on Friday that it is no longer spinning off its online gambling business to a SPAC. Outgoing CEO Matt Maddox has been through arguably the most difficult tenure a gambling CEO has ever seen.
Wynn Resorts has announced it will abandon its online gambling SPAC. In the third quarter, revenue was $994.6 million, up from $370.5 million a year ago. Las Vegas performed well, with $476 million in revenue and $183.4 million EBITDA. Boston Harbor did well with revenue of $192.2 million and EBTDA of $64. 6 million. Macao is a drag, generating $130.7 million revenue but negative $1.9 million of property EATDA, which is not surprising given industry trends.
Wynn Interactive spin off with a SPAC called Austerlitz Acquisition Corporation I was called off this week. Management said that spending to acquire customers is too high. DraftKings and MGM Resorts are investing heavily in growth spending. Wynn can't compete with these companies.
Wynn Resorts is doing well in Las Vegas and Boston. Macao is down for everyone, so it's not clear what's next for the company. It's generating $600 million in adjusted EBITDA annually, which could double once Macoa returns to normal. The company is focusing on what makes money in online gambling. It wasn't clear that the SPAC path had a profitable future, and with so much competition it may be a better idea to focus on profitable customers.
