Wynn’s outgoing CEO: “Competitors are spending too much to get customers”
Matt Maddox insists focus is on “not losing lots and lots of money” as casino group’s WynnBet acquires 26,000 FTDs in Arizona during September
Wynn Resorts CEO Matt Maddox has accused rival sports betting operators of over-spending to acquire users and has described the Arizona market as “really not sustainable.”
Speaking during the operator’s Q3 results, Maddox, who is due to step down after 20 years with the business and four years in the top job, singled out Arizona as being a particularly challenging state.
“We made great progress in Arizona with first-time depositors,” he noted. “And we are seeing good customer feedback and our retention is quite strong. However, the market is not really sustainable right now.
“Customers are spending too much to get customers. And the economics are just not something that we’re going to participate in, in the short term.
“So while we built the brand, [and] we launched the product in the third quarter, we’ve going to be focused on building a long-term business that’s sustainable, that is not losing lots and lots of money.”
Maddox added that Wynn was shifting its strategy to “think about the future” and to “think about cash preservation.”
Wynn revealed it managed to acquire more than 26,000 first-time depositing customers in Arizona with WynnBet after the market went live in September through to the end of the month.
Meanwhile, Wynn Interactive generated turnover of $645m across all its states in the third quarter, the later part of which was dominated by acquisition around the new NFL season.
Wynn Interactive trumpeted the fact it is one of nine operators awarded coveted licenses to offer online sports betting in New York, and the fact it is an official sports betting partner of the NFL.
However, CFO and interactive chief Craig Billings, who will take over as CEO from Maddox in 2022, reiterated the struggles challenger betting brands face.
“While sports betting remains an exciting, high-growth market and will potentially be a $30bn to $40bn TAM 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,” he said.
“In light of this dynamic, we are intentionally pivoting our approach to scaling, taking a more measured and long-term focus to grow a healthy and sustainable business, as Matt mentioned.”
Following the earnings call, Wynn shares closed at $92, down 2.2% on the day.