Borgata Online Casino Shows Steady ProfitPublished May 11, 2015 by Elana K
Borgata and its online partner bwin.party have posted profit for the third quarter in a row, vindicating supporters of online gambling in New Jersey who predicted large profit.
Borgata’s online casino has posted a profit for the third straight quarter, giving supporters of online gambling in the United States a much-needed morale-boost.
Keith Smith, President and CEO of Boyd Gaming, Borgata’s parent company, commented,“Our online business continued to perform well, generating a profit for the third consecutive quarter.” He continued, “Borgata’s online gaming business contributed more than $4 million to the property’s EBITDA gain as last year’s $3 million loss swung to a profit of $1 million during the first quarter of this year.”
The New Norm?
Smith said that the trend for Borgata’s online offerings will become the new norm. The reason he said, is that the launch of online casino sites in the Q1 of the first year entailed “significant start-up marketing cost that were not repeated this year.” Once the first-time expenditures were not repeated, it was only a matter of time before the company yielded profit. And that's what happened: In Q2 of 2014, Borgata’s online site broke even. In Q3, they turned a profit for the first time, and have continued on for two more consecutive quarters.
Will PokerStars Bring Trouble?
The pending entrance of PokerStars into the United States online market might make Borgata change its tune, as well as other online casinos in New Jersey. PokerStars was not granted a license in the past due to New Jersey's "bad actor" clause, but Resorts AC Morris Bailey has said that the licensing process for PokerStars, its New Jersey online partner, finishing up.
Last November, Smith had commented that Boyd had “built the model to operate online gaming in New Jersey," and that "we just assumed they (PokerStars) would be involved at some point in time.” However, his last report on Borgata’s earnings did not mention PokerStars and how it would affect the company’s profit.