Caesars Entertainment Finalizes Acquisition of WynnBet's Michigan iGaming

Caesars Entertainment has completed a significant acquisition that strengthens its iGaming portfolio. The renowned entertainment and hospitality company has finalized the previously announced purchase of WynnBet’s iGaming operations in Michigan. This move also includes the extension of an iGaming rights deal with the Sault Ste. Marie Tribe of Chippewa Indians.

“Caesars Entertainment would like to thank the Sault Ste. Marie Tribe of Chippewa Indians and the Michigan Gaming Control Board for their collaboration through this process,” said Eric Hession, President of Caesars Digital, in a statement.

New Brand Launch in Michigan

As part of this strategic acquisition, Caesars plans to launch a new iGaming brand in Caesars Palace Casino brands, both of which are operational in the state.

The acquisition comes amid WynnBet’s broader strategy to downsize its operations across the United States. Last August, WynnBet announced its exit from eight of the twelve U.S. gaming markets it was licensed in, which included states like Arizona, Colorado, Indiana, Louisiana, and New Jersey.

WynnBet’s Strategic Exit

Earlier this year, WynnBet exited the Massachusetts online sports betting market following a leave request submitted to the state’s Gaming Commission. Although WynnBet has ceased its online operations in Massachusetts, it maintains a physical presence at Encore Boston Harbor. Additionally, WynnBet sold its New York sports betting license to Penn Entertainment for approximately $25 million, paving the way for the launch of ESPN Bet.

In February, Caesars announced its intent to acquire WynnBet’s online casino operations in Michigan, one of the top three states in the U.S. online casino market, often generating over $200 million in iGaming revenue monthly. The successful completion of this acquisition this week marks a crucial step forward for Caesars in this highly competitive market.

Strengthening iGaming Presence

Through this acquisition, Caesars has extended the contract with WynnBet’s gaming partner, the Sault Ste. Marie Tribe of Chippewa Indians. Caesars Digital President Eric Hession expressed gratitude for the partnership and the regulatory received during the process.

Caesars intends to run the existing WynnBet platform without any interruption to the customer experience. This strategic move is expected to enhance Caesars’ iCasino net revenue growth in an EBITDA-accretive manner, providing a robust foundation for future expansion.

Key takeaways from this acquisition include an increase in Caesars‘ customer base in Michigan, potentially propelling the company ahead of BetRivers for the fourth spot in monthly online casino revenue in the state. In May, WynnBet’s operations contributed $2,573,666, which would have positioned Caesars to sur BetRivers with a combined total nearing $15 million monthly.

Competitive Market Dynamics

The U.S. online casino market remains highly competitive, with Michigan, Pennsylvania leading in monthly revenue figures, each consistently exceeding $180 million. For brands like Caesars, having a strong customer base is a critical competitive advantage. While established names like FanDuel, DraftKings, and Caesars leverage their brand recognition, smaller brands like WynnBet often seek creative strategies to attract customers.

The acquisition of a competing operator, as demonstrated by Caesars’ purchase of WynnBet’s Michigan operations, is an effective strategy to expand market presence and customer reach rapidly. When announcing the acquisition in February, Matt Sunderland, Senior Vice President at Caesars, emphasized the importance of tapping into significant markets and customer bases to grow their digital offerings.

In Michigan’s online casino market, Caesars now stands in a stronger position among the top five revenue players, including BetMGM, FanDuel, DraftKings, and BetRivers. With this acquisition, Caesars aims to secure a firm grip on the fourth position, enhancing its overall market share and solidifying its status as a leading player in the online casino industry.

Source:

CAESARS ENTERTAINMENT, INC. COMPLETES PREVIOUSLY ANNOUNCED ACQUISITION OF MICHIGAN IGAMING OPERATIONS FROM WYNN RESORTS, investor.caesars.com, June 18, 2024.