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Analyzing New Jersey Online Gambling Partnerships

Jul.05, 2013 10:55:PM
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Ten of the twelve Atlantic City casinos have announced their online gambling partners.  Here is a look at each partnership and issues some may face with licensing. 

Caesars Entertainment and 888

Caesars Entertainment chose 888, its Nevada partner, to offer online gambling to its players in New Jersey.  This agreement was actually signed through Caesars Interactive, which is a subsidiary of Caesars Entertainment.  Caesars owns four Atlantic City resorts. They are Bally’s, Caesars, Harrah’s and Showboat.

888 is an experienced European online poker and casino operator.  888 is already licensed in Nevada and was also chosen as a primary vendor in Delaware.  It operated in the U.S. until 2006.  That should not affect the company’s ability to receive a license in New Jersey as there is no bad actor clause.

Borgata and bwin.party

Borgata has two owners.  Boyd Gaming and MGM Resorts each own 50% of Atlantic City’s most profitable resort.  These companies partnered with bwin.party, just as they did in Nevada.  The Nevada launch is delayed because bwin.party has been unable to secure a Nevada interactive license.

There are a number of potential licensing issues facing bwin.party.  The companies that later merged to create bwin.party operated in the U.S. until 2006.  Party Gaming and one of its founders settled with the U.S. Government, though guilt was never admitted.  It later merged with bwin, which had not reached any such settlement.  The new company also recently settled with Kentucky for $15 million.  The State alleged that this was a refund of illegal gambling losses suffered by its residents.

Calvinayre.com reported that bwin accepted sports bets from U.S. players before it left the U.S. market.  Accepting sports bets from U.S. players does not fall into questionable legal ground.  The Wire Act clearly makes this illegal.  Party Poker has also been known to secretly restrict its winning players.  This lack of transparency was not taken well by players when it was discovered.  It may even be illegal under Uston vs Resorts International.  This is just a sample of the potential issues facing bwin.party.

Golden Nugget and Bally Technologies

Golden Nugget partnered with Bally Technologies.  The two companies are also partnered in Nevada.  Bally Technologies is already licensed in New Jersey to provide slot machines to casinos.  Approval for this partnership is a sure thing.

Resorts and PokerStars

Resorts took a huge gamble and chose PokerStars as its software provider.  PokerStars is the most controversial choice in the Atlantic City online gambling scene.  The American Gaming Association opposes the licensing of PokerStars in New Jersey. PokerStars settled its Black Friday court case with the U.S. Government for $731 million in 2012.  It is also the subject of legal action by Kentucky related to its domain. 

PokerStars does not have casino software.  Resorts has either accepted that it will only offer poker or they are aware of how PokerStars will offer casino games. 

If this gamble by Resorts pays off and PokerStars gets approved then the partnership could be the most important in New Jersey.  PokerStars is one of the most well known poker brands in the U.S. even though it left the market more than two years ago.  PokerStars also possesses a very valuable online poker player list.  The company has an outstanding reputation with players and its software is advanced.  Resorts does not have a poker room at this time.  This partnership may change that if it is approved.

Trump Taj Mahal and Ultimate Gaming

Trump Taj Mahal partnered with Ultimate Gaming, which owns Ultimate Poker, the first regulated online poker room in the United States.  Ultimate Gaming is licensed in Nevada and should have no problem getting licensed in New Jersey.

Trump Plaza and Betfair

While owned by the same company as Trump Taj Mahal, Trump Plaza chose a different software provider.  Betfair will offer poker and casino games to Trump Plaza players.  Choosing different online providers for each property may show that Trump Plaza is still for sale.  A previous $20 million deal with Meruelo Group already failed.

Betfair owns TVG, which is an advance deposit wagering company for horseracing.  TVG is already licensed in New Jersey so this will help Betfair’s chances of getting licensed for online poker and casino games.  Betfair does have a history of problems in Europe though that should be considered. 

Betfair botched a Happy Hour promotion in 2010 where the company reneged on payments owed to players.   The amount owed to players has been estimated to be at least $1 million.  The company even refused to refund player deposits or losses.  Betfair also implemented a controversial premium charge for big sports winners and in some cases has applied this retroactively.  The UK Advertising Standards Authority has found Betfair guilty of false advertising on several occasions.  Betfair’s reputation has suffered greatly in recent years due to these actions.

Tropicana and Gamesys

Tropicana and Gamesys have agreed to join forces.  Gamesys is a British social media company.  This partnership seems certain to be approved.  The Tropicana in Atlantic City is owned by the same company that owns the Tropicana in Laughlin, NV.  The company has not applied for an interactive gaming license in Nevada.  The Tropicana in Las Vegas is owned by a different company.

Two Companies Have Not Announced Partners

Atlantic Club and Revel have yet to announce their online gambling partners in New Jersey.  Atlantic Club backed out of a deal with PokerStars.  Revel has been quiet about its online gambling future.  Both companies have serious financial issues.