Las Vegas casino and hospitality operator Wynn Resorts is set to take its young online sports betting business public by merging it with special purpose acquisition company (SPAC) Austerlitz Acquisition Corp. I, news emerged Monday.
Austerlitz is a blank-check company created by Texas-born businessman William “Bill” Foley. Under the terms of the deal, Wynn will retain 58% of the combined business that will be valued at around $3.2 billion.
This is the latest in a series of mergers between SPACs and US-facing online sports betting and iGaming companies announced over the past year. Most recently, Super Group, the owner of major European digital bookmaker Betway, announced plans to tie up with Sports Entertainment Acquisition Corp. and go public on the New York Stock Exchange.
The deal between Wynn and Austerlitz is set to bring about $640 million in cash to the newly formed venture. Mr. Foley’s Cannae Holdings Inc. is also expected to invest.
The combined entity will operate as Wynn Interactive Ltd. and will trade on the Nasdaq with the WBET ticker symbol. The company will run the WynnBET online sports betting brand. The transaction is expected to close by the end of the year.
Wynn Interactive’s digital wagering operation currently provides its services in six states where sports betting is legal and has gained access to a total of 15.
Transaction to Unlock Wynn Interactive’s “Tremendous Potential”
Commenting on their announcement, Wynn Resorts CEO Matt Maddox said that they are confident their SPAC merger will “unlock the tremendous potential of Wynn Interactive to further accelerate growth and enable the business to capture the massive opportunity in North America.”
It should also be noted that aside from the online sports betting business the new entity will also run the physical sportsbooks at Wynn’s properties in Las Vegas.
The gaming and hospitality powerhouse projects that its online revenue will exceed $700 million in 2023, based on a 5% to 7% share of the US digital gambling market. The company’s Internet betting revenue currently stands at around $100 million.
There has been a surge in SPAC deals in the US in the past year. According to industry observers, many gambling executives see a combination with a blank-check company as a quick way to get their business to market with a potentially bigger fund raise and reduced complexity than the traditional IPO process as the US regulated sports betting space continues to grow with a rapid pace.
DraftKings last April merged with Diamond Eagle Acquisition Corp., while Rush Street Interactive and Golden Nugget Online Gaming closed their tie-ups with blank-check companies dMY Technology Group and Landcadia Holdings II, respectively, late in 2020.
As mentioned above, Betway’s holding company is expected to merge with a SPAC later this year as it eyes entry into the US sports betting market.
Source: Wynn to Take Online-Betting Business Public in SPAC Merger, Bloomberg, May 10, 2021