Every major gaming company is eyeing mobile and online sports betting as a potential growth engine over the next decade but no one knows exactly how the industry will play out. MGM Resorts and Boyd Gaming have partnered and have the potential for a nationwide network of mobile and online sports betting, and Caesars Entertainment has partnered with Scientific Games to power its sports betting apps. But neither partnership is a guaranteed winner.
One company that's been relatively quiet is Wynn Resorts (NASDAQ:WYNN), which doesn't have the same geographic reach of MGM, Boyd, or Caesars and hasn't typically been a big sports-betting player in Las Vegas. But Wynn is now placing its bets on a sports betting social network that could be an interesting play in the gaming industry.
Betting on BetBull
Wynn announced late last week that it is partnering with BetBull Limited, a European digital sports betting company, to advance betting in the U.S. market. BetBull primarily operates in the U.K. and has both sports betting and a social aspect, where one can follow their favorite betters on the network. The latter allows betters big and small to comment on each other's ideas and feel engaged in the community.
Players who are looking for unique betting ideas or options may find the format appealing and if the social setup may create something of a network effect that attracts more customers as it gets bigger.
Details of the partnership weren't announced, but it's likely BetBull will leverage Wynn's gaming license to gain a foothold in the U.S. On top of that, Wynn will take a 22.5% stake in the company, so it will benefit from any upside BetBull has in the U.S. or around the world.
A long shot worth taking
If I had to bet, I think MGM, Boyd, and Caesars are all better positioned to win market share in sports betting in the U.S., just based on their scale. Wynn is effectively playing from behind because it only operates in Nevada and, soon, Massachusetts.
Given those disadvantages, partnering with BetBull is an interesting play in sports betting. The social network dynamic of the company's platform could make it a hit with consumers who are looking for betting ideas, a variety of betting options, and a social aspect. It's similar to what makes watching video games on platforms like Twitch so attractive -- the social dynamic even from home is key for users.
BetBull is also a low-risk option for Wynn. The press release announcing the partnership didn't disclose what its 22.5% stake would cost, but it's probably insignificant compared to the potential upside. The American Gaming Association has estimated that $150 billion is bet per year on sports, most of that in illegal formats. Any company that can take a significant share of that market could win big, and this may be the best bet Wynn Resorts can take given its disadvantages in the market.