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Anthony Smedile

An online gambling firm that is negotiating to buy an Atlantic City casino filed an application Monday to cash in on New Jersey's Web betting operations, a senior executive said.

London-based 2UP Gaming PLC becomes the latest company to announce its intentions to offer Internet wagering on casino slot machines and table games. Monday was the deadline for applications to be filed with the New Jersey Division of Gaming Enforcement, the regulatory agency that will issue Internet gambling licenses.

Last week, 2UP announced a partnership with the New York investment firm MidOil USA to buy an existing Atlantic City casino. MidOil's managing director, Vincent Crandon, who will oversee 2UP's operations in North America, said negotiations continue with undisclosed casinos.

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Crandon insisted that 2UP and MidOil have every intention of developing a new Boardwalk casino if they can't reach a deal by Labor Day to buy an existing property.

"If we don't have a deal that makes sense, we're just going to build something," he said in an interview.

Under New Jersey's Internet gambling law, casinos must have a physical presence in Atlantic City to offer Web bets. They are lining up partnerships with online companies for Internet gambling sites.

In a preliminary step for entering the Atlantic City market, 2UP filed an application Monday for an Internet license, Crandon said.

"Do we think it is an amazing market opportunity? Yes. Do we think it's a game-changer for New Jersey? Yes," Crandon said of the emerging Internet gambling operations.

Internet wagering represents the biggest expansion of gambling in Atlantic City since the land-based casinos began operating in 1978. Web betting is expected to provide a huge lift for the casinos, with revenue estimates ranging anywhere from $200 million to $1.2 billion annually. Nov. 26 is New Jersey's target date for launching Internet gambling.

"Through marketing efforts, we believe the casinos will significantly boost the market and provide an enhanced gaming opportunity that will supplement the bricks-and-mortar operations," David Rebuck, director of the Division of Gaming Enforcement, said of the impact of Internet gambling.

Although Monday was the deadline for filing paperwork, the division said it would not immediately release the names of the applicants. Names will not be publicly divulged by the division until the companies are added to a list of active vendors, spokeswoman Lisa Spengler said.

Despite Monday's deadline, companies have the freedom of filing Internet applications later on. However, late filers take the chance the division may not be ready to issue them a license by the time Internet gambling goes live in November.

All 12 Atlantic City casinos have notified the division they intend to offer Internet gambling. Some already have announced their partnerships with online firms, while others have held off.

Up to this point, 10 casinos have reached partnerships, according to Wall Street analysts. However, online gambling operators are not guaranteed a New Jersey license simply because they file an application. They will undergo an extensive background check and must meet the state's regulatory requirements for a license.

Previously, the Bally's, Caesars, Harrah's Resort and Showboat casinos, owned by Caesars Entertainment, announced an Internet partnership with 888 Holdings. Borgata Hotel Casino & Spa is teaming up with Bwin.party, Resorts Casino Hotel is partnering with PokerStars, and Trump Taj Mahal Casino Resort has linked up with Ultimate Gaming.

Golden Nugget Atlantic City will go with its own brand of Internet gambling, using Bally Technologies as its main technology provider. Tom Pohlman, Golden Nugget's general manager, said he believes Internet gambling is shaping up as a multibillion-dollar market across the country and his company wants to play a major role in it.

"Golden Nugget will operate in both Nevada and New Jersey, with the intent to offer online gaming in more states in the future," Pohlman said.

Casino analysts Chad Beynon, of Macquarie Capital, and Andrew Zarnett, of Deutsche Bank, have disclosed other casino-Internet partnerships in reports to investors. They said Tropicana Casino and Resort has teamed up with Gamesys and Trump Plaza Hotel and Casino is partnering with Betfair. Tropicana and Trump Plaza did not immediately respond to emails Monday from The Press of Atlantic City seeking to confirm their Internet partnerships.

Atlantic Club Casino Hotel and Revel Casino-Hotel have not yet negotiated deals with Internet partners, Beynon and Zarnett said. Atlantic Club spokeswoman Cathleen Kiernan said Monday the casino had no announcement to make. Revel executives were not immediately available for comment.

The most controversial company seeking a license is online global gambling giant PokerStars, based on the Isle of Man. PokerStars got together with Resorts after negotiations fell apart for PokerStars to buy the Atlantic Club.

PokerStars has filed a lawsuit in an attempt to complete the sale, but Atlantic Club is resisting. So far, the courts have ruled in Atlantic Club's favor, saying it had the right to back out of the deal after PokerStars failed to secure regulatory approval in time to complete the purchase.

Other companies also hope to take advantage of New Jersey's online gambling. KGM Gaming announced Monday it is the first company to submit a fully operational remote content server for Internet gambling. The next phase calls for testing of the KGM server by the Division of Gaming Enforcement.

KGM, which is based in Philadelphia and has a local facility in Pleasantville, plans to offer an array of Internet casino games for both mobile devices and home computers.

Howard Weiss, KGM's president and chief executive officer, said his company is in negotiations with six casinos for the content server. He declined to name the casinos at this time, but stressed the importance of being at "the forefront of gaming history" in New Jersey.

"I think we're now entering a whole new type of gaming," Weiss said of Internet wagering.

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