GPWA Times Magazine - Issue 29 - July 2014

Affiliates facea differentbusiness environment in New Jersey By DanPodheiser N ew Jersey's regulatedonline gamingmarket launchedNov. 26, 2013, toamyriadof expectations.Gov. ChrisChristieprojected the state would earn $180million from a 15 percent online gaming tax in the first fiscal year alone, but other industry analysts and regulators weren't quite sobullish. Seven months in, the market has failed to live up to the hype. New Jersey casinos took in $11.9million inonline gaming revenues inMarch, but that number fell to $11.4 million inApril (accounting for the extra day inMarch, the per-day revenue dropwas $3,870 per day, or about 1 percent). At the current rate, the state's online gaming taxwill produce $12 million in the first fiscal year — just 6.7 percent of Gov. Christie's aggressive forecast. Still, it's far too early to call the industry a failure, and the major stakeholders remain positive despite the slow start. BorgataCasino.com andnetworkpartner PartyPoker recorded a $3.2million loss in the first quarter of 2014. But BoydGaming (co-owner of the Borgata) CEOKeith Smith said in a May earnings call that the company's online gaming business "will be cashflowneutral or profitableby the endof theyear." And the Borgata certainly has reason to be optimistic. The Borgata and Party Poker lead New Jersey with a combined 36 percent share of the market, awhopping figure considering there are 11 licensed sites in the state.More than55,000onlineaccountshavebeencreatedatBorgatasites sinceNovember andnearly 75 percent are playerswho have not visited theBorgata'sbrick-and-mortarproperty inAtlanticCity inat least ayear, according toSmith. But likeanynew industry, therearestillkinkstobeworkedout.Operators areconstantlyadjusting tomeetboth regulatoryandconsumerdemands. Eightyears removed from thepassingof theUnlawful InternetGambling EnforcementAct (UIGEA) of 2006and just threeyears fromBlackFriday, people need to be convinced that an online casino in the U.S. is safe and reliable. There's still a longway togo. 41 Affiliates face a different business environment inNew Jersey