N.J. gamblers lost $9.5M online in January

Atlantic City's Revel. The state widened Chatham Revel Voteco's stake in the casino hotel. AKIRA SUWA / Staff Photographer
Atlantic City's Revel. The state widened Chatham Revel Voteco's stake in the casino hotel. AKIRA SUWA / Staff Photographer
Posted: February 14, 2014

ATLANTIC CITY - Gamblers in New Jersey lost $9.5 million playing poker, slots, and other casino games online in January. That was $2 million, or 28 percent, more than in December, the first full month of legal Internet gambling in the state, the New Jersey Division of Gaming Enforcement reported Wednesday.

Caesars Interactive Entertainment Inc., which has three online brands in New Jersey - CaesarsCasino.com, Harrahscasino.com, and WSOP.com - accounted for nearly half of the increase.

"We started marketing in earnest in early January, and the promotions we offered our customers really seemed to resonate well," said Seth Palansky, spokesman for Caesars Interactive. "We're very encouraged on how the New Jersey market is performing for us across all three of our brands."

The Caesars Interactive numbers include results from sites operated by its partner, 888 Holdings P.L.C.

Borgata and its online partner, Partypoker, remained the market leader, with $3.89 million in winnings from gamblers, for a 41 percent market share. That was down from Borgata's 45 percent market share in December.

Atlantic City's land-based casinos won $186.29 million from gamblers in January, down 9.2 percent from last year. Excluding the results from Atlantic Club, which closed Jan. 12, the revenue decline was 7 percent.

Separately Wednesday, the New Jersey Casino Control Commission found Chatham Revel Voteco L.L.C., the company that owns the biggest equity stake in the financially struggling Revel Casino Hotel, "qualified" to hold equity interests in Revel's holding company.

"Chatham's commitment to Revel through its ongoing financial professional support is certainly noteworthy," Matthew B. Levinson, the commission's chairman and chief executive, said during the hearing.

Being qualified means that Chatham Revel Voteco was found suitable to hold a casino license, even though Revel's license is actually held by a separate legal entity, Revel Entertainment Group L.L.C.

When Revel exited bankruptcy last May, the casino regulators temporarily authorized Chatham Revel Voteco to hold a 22 percent stake in Revel. That authorization would have expired at the end of this month.

Chatham Revel Voteco, which is affiliated with Chatham Asset Management, a hedge fund in Chatham that is slated to receive a $300 million investment from New Jersey's pension fund, has since increased its stake in Revel to 28.7 percent.

Revel has 7.89 million shares outstanding. A January prospectus for a mutual fund, American Funds' Capital Income Builder, valued 41,677 shares of Revel at $344,000 or $8.25 each, as of Oct. 31. That was 93 percent less than the fund paid in February 2012, according to the prospectus.

At $8.25 per share, the overall value of Revel's equity was about $65 million.

Revel cost $2.4 billion to build and has lost more than $350 million since opening in April 2012.

Little was said at the hearing about Revel, which is likely to be sold soon.

"This is Chatham's hearing," said John E. Adams Jr., a deputy attorney general who represented the Division of Gaming Enforcement at the hearing. "This is not a proceeding about Revel."



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