Wynn Spins Digital Gaming Into Bill Foley SPAC in $3.2 Billion Deal

Publicly traded Wynn Resorts is spinning off its mobile gaming and sportsbook business through a special purpose acquisition company formed by Vegas Golden Knights owner Bill Foley. The deal results in a $3.2 billion valuation for Wynn Interactive, which houses mobile casino and sports betting offerings WynnBet, BetBull and WynnSlots.

“Wynn is the premier brand in gaming and luxury resorts, and we believe our investment in Wynn Interactive fits the criteria for the type of company and management team with which we like to co-invest,” Foley said in a press release announcing the deal. “I’m optimistic about the future of U.S. online casino gaming and sports betting.”

The Foley-led Austerlitz I SPAC will bring as much as $640 million in cash to the newly independent business, and Foley’s privately held Cannae Holdings will backstop financing the deal, covering any redemptions by shareholders of the blank check who wish to cash out. That eliminates the risk of PIPE financing falling through, which has been an issue delaying or killing mergers in the SPAC market of late. Under terms of the deal Wynn Resorts will retain control of Interactive with 58% of the equity and 72% of the voting power. SPAC shareholders will own 18% of the business and Austerlitz’ sponsor—Foley—will own 3% of the business. The transaction is projected to close at the end of this year.

The valuation of Wynn Interactive at $3.2 billion is about 4.5 times its projected 2023 revenue, which assumes 171% growth in the business from this year, according to a presentation for investors. Wynn formed the Interactive division in October, following the acquisition of 72% ownership of BetBull for about $80 million. The legalization of sports betting and igaming by U.S. states is expected to drive that growth, according to the company. The business has online sportsbooks in six states right now and assumes that Massachusetts, where Wynn has a casino, will legalize sports betting, according to the presentation.

Foley has four active SPACs, including Austerlitz I, which raised $690 million in an IPO earlier this year. He previously closed a deal with another SPAC, Foley Trasimene I, to bring PaySafe public.

There are 120 active sports-related SPACs seeking targets or seeking to price their IPO, according to the Sportico Sports SPAC Tracker.