Borgata Hotel Casino & Spa plans to jump right into the Internet gambling market. Executives with the casino’s parent company said Wednesday they believe it will complement Borgata’s land-based games and draw new visitors to Atlantic City.
Keith Smith, president and chief executive officer of Boyd Gaming Corp., said Borgata will quickly introduce online wagering once New Jersey officials finish the regulations. He did not give a specific date.
“We intend to be among the first to offer online gambling in the state of New Jersey and are confident the Borgata brand will allow us to capture a substantial share of this lucrative market,” Smith told analysts during a conference call on Boyd’s first-quarter earnings.
Although Smith described the New Jersey market as lucrative, he declined to give any estimates on the amount of Internet gambling revenue it may produce for the company. Casino analysts and state officials have widely estimated Internet revenue from $200 million to $1.2 billion annually. Smith said the actual figure may fall somewhere near the middle.
Internet gambling is expected to begin by Nov. 26, according to New Jersey regulatory officials. The state Division of Gaming Enforcement is in the process of crafting the regulations to govern Web betting on casino slot machines and table games.
Smith said Boyd does not believe Internet gambling will cannibalize business from Borgata’s brick-and-mortar operations. In some cases, particularly with poker players, it could actually drive more visitors to Atlantic City, he added.
“We think it’s going to be a great addition to our land-based platform,” Smith said.
Borgata is counting on Internet gambling to boost profits, which were down in the first quarter compared to last year. Net revenues fell 6 percent to $165.6 million, while gross operating profits plunged 27 percent to $28.4 million compared to the same quarter in 2012, Boyd reported Wednesday.
Borgata, however, remains Atlantic City’s leading casino. Paul Chakmak, Boyd’s chief operating officer, said Borgata was able to “outperform the market in every category in the first quarter.”
Chakmak pointed out that Borgata grabbed a 22 percent market share of the slots revenue for the quarter, up 2 percent. It also captured a little more than 50 percent of Atlantic City’s poker revenue, he said.
“Borgata is clearly maintaining its leading position in the market,” Chakmak said.
Overall, the Atlantic City market remains under pressure from the lingering effects of Hurricane Sandy and competition from casinos in surrounding states, Boyd executives said. In an optimistic outlook, Smith noted Borgata has begun to recover from the hurricane as it prepares for the arrival of the peak summer tourist season.
“We’re expecting a busy summer, and we’re expecting good results from Borgata over the summer,” he said.
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