N.J. online gambling revenue short of some predictions

Results were "about what we expected, and considering that the technology is still shaking out some kinks, we feel really good," a Borgata official said.
Results were "about what we expected, and considering that the technology is still shaking out some kinks, we feel really good," a Borgata official said. (AP)
Posted: January 16, 2014

Online gambling in New Jersey generated $8.4 million in revenue from Nov. 21 through December, the New Jersey Division of Gaming Enforcement said Tuesday.

The results for the six Atlantic City casino operators licensed for Internet gaming and their online partners were weaker than analysts expected. Most were expecting at least $10 million, despite a slow start caused by technological difficulties.

In total, Atlantic City casinos won $2.86 billion from gamblers last year, regulators reported, the first time since 1991 that Atlantic City logged less than $3 billion.

The total was 6.2 percent less than in 2012.

Online, as in the real world, Borgata trounced its competitors, recording $3.75 million in online gambling revenue, 44 percent of the total, through the end of the year.

Borgata's brick-and-mortar market share was 22 percent last year.

Results for online gambling "are about what we expected, and considering that the technology is still shaking out some kinks, we feel really good about it," Tom Ballance, Borgata's president and chief operations officer, said.

Caesars Interactive NJ, which has online permits for Bally's AC and Caesars, was second with $2.38 million in revenue.

Analysts expect the online market to pick up through this year, as technical problems abate and casinos step up marketing.

"I wouldn't be surprised to see January numbers come in around $12 million or higher," said Adam Krejcik, managing director at Eilers Research L.L.C., of Anaheim Hills, Calif.

It remains unclear if online revenue will reach even the lowest annual estimates of $170 million to $200 million, which is the range Eilers predicted.

Ballance said his casino was ready to accelerate advertising, now that online operations are going more smoothly.

While online poker has gotten most of the attention in New Jersey, online slots and other games generated more revenue in December. Online poker accounted for $2.89 million in revenue. Casinos won $4.5 million from other games. Online revenue from November was not included in this breakout.

Both of those revenue figures represent a percentage of the amounts bet by gamblers. In brick-and-mortar casinos, the casinos kept between 8.4 percent and 10 percent of every dollar fed into a slot machine in December.

But those figures are secret for online operations.

"The win percentage for online games is not a component of the Internet tax report and thus is confidential information," said Lisa Spengler, spokeswoman for the division of gaming enforcement.

That means slots players cannot judge how much the casinos are keeping.


BY THE NUMBERS

$2.86B

Atlantic City's total gambling revenue in 2013.

-6.2%

Change from 2012.

$8.4M

N.J. online gambling revenue since Nov. 21.

44%

Online market share for Borgata and online partner.


hbrubaker@phillynews.com

215-854-4651

@InqBrubaker

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