Borgata Reports Losses in Q2, But PokerStars Could Increase NJ Revenues
Borgata, the most successful of New Jersey’s legal online gambling ventures, reported an operating loss of $1.8 million in the recent fiscal quarter, which ended on June 30. The company gave good-and-bad news, as it stated that the company broke even for the first time in July. This was described as a “key milestone” by Borgata Online executives.
Keith Smith, the CEO of Boyd Gaming Incorporated (Borgata’s managing partner), says that the three-month decrease in gaming revenues should be a short-term trend. When cooler weather returns, the kids are back in school, and summer travel is over, New Jersey gambling revenues should increase once again.
PokerStars Likely to Enter NJ Market
Another good sign is the likely appearance of the world’s largest poker site in the New Jersey online gaming market. With Oldstone’s purchase by Amaya Inc., PokerStars is likely to enter the New Jersey market in the coming months.
Amaya Gaming Group (now “Amaya Inc.”) purchased Oldstone Group, the parent company for PokerStars and Full Tilt Poker, recently. Shareholders for Amaya approved the sale on August 1. The acquisition originally was set to be finalized by September 30, but the recent decision means PokerStars could join the legal and licensed websites a couple of months earlier.
Division of Gaming Enforcement Is Key
PokerStars signed an agreement with Resorts Casino in Atlantic City to operate the Resorts online casino and poker room. According to New Jersey law, an online gaming operator must be partnered with one of the already-licensed Atlantic City casinos. Part of the reason for allowing such activity is to help the Atlantic City casinos find new revenue streams.
From June until October 2013, it was expected that the Resorts/PokerStars partnership would be approved for a license, like the other applicants. The New Jersey Division of Gaming Enforcement then “suspended” the licensing process, just weeks prior to the rollout of New Jersey online gambling November 2013. This was not a denial or rejection–but a simple stop on the process. At the time, the DGE said it would revise their decision at a time PokerStars either got its longstanding issued with the U.S. federal government resolved, or the PokerStars executives who particularly offended U.s. officials were no longer at the gaming company.
The purchase of PokerStars by David Baazov’s company seems to fulfill the second stipulation set down by the Division of Gaming Enforcement. If so, then the most popular online poker site could be active in New Jersey shortly.
Impact of PokerStars
Experts in the industry see such an eventuality as a positive sign for an Atlantic City gaming industry beset with bad news. Adam Small Pocket Fives recently gave his opinion for the impending arrival of PokerStars on the New Jersey scene.
Small said, “The acquisition of PokerStars and Full Tilt Poker by Amaya is great news for poker players in New Jersey. It means that more than likely the top poker company in the world will soon be offering its games there.”
It’s hard to overstate the impact PokerStars could have. When PokerStars was last active in the United States, it was the #1 poker site for a reason. Sure, it had the good luck of having PokerStars WSOP satellite tournament event winners Chris Moneymaker and Greg Raymond win the World Series of Poker Main Event back-to-back. Their meteoric success can be traced to more than just the good publicity those events brought.
Why PokerStars Is the Best
Ask US players and they will largely tell you that PokerStars ran the best business. They had the biggest rooms, the most tournament, the most user-friendly software, and the biggest prizes. In essence, PokerStars was the best poker site in the world. When American gamblers get a chance to legally choose PokerStars again, they are likely to flock to the site. What kind of an impact that could have on the revenues for the state of New Jersey or Resorts Casino is uncertain, but it couldn’t hurt.
Of course, the inclusion of PokerStars to the New Jersey market could make it harder for Borgata Online to make the revenues they’ve been projecting, after their startup costs are phased out. But competition should be good for PokerStars’ Atlantic City competitors, because they might learn some tricks from their new rival.
