Potential New Jersey Online Casino Operators

Potential New Jersey Online Casino Operators

njsealNew Jersey became the third state to legalize online poker or casino games this week.  The state looks to get their new industry off the ground as soon as possible.  They will need the help of Atlantic City casinos to get there.  The companies that may be licensed to operate online poker and casino games in New Jersey must also hold a gaming license to operate a brick and mortar casino in Atlantic City.  There are only 12 Atlantic City casinos held by what will be nine different owners after Trump Plaza sells to the Meruelo Group later this year.  The level of expertise among these nine companies varies greatly, not just in traditional casino operations, but in online gambling.

PokerStars

The most obvious potential player in the New Jersey online gambling market is PokerStars.  They are set to acquire the Atlantic Club, a struggling casino that recently started marketing itself to locals.  PokerStars has offered to pay $50 million for the aging property.  It would seem that PokerStars is attempting to use the Atlantic Club purchase as a way to legitimizing its potential US facing online poker business.  There is one major obstacle between PokerStars and New Jersey online poker.  They have yet to receive a gaming license in the state.  While New Jersey failed to include a bad actor clause that would prevent them from entering the market, there is still a possibility that PokerStars may not get licensed due to its past legal trouble with the Department of Justice.

PokerStars also does not have much in the way of casino experience.  This includes brick and mortar or over the internet.  This is less of a hurdle.  PokerStars’ deep pockets should help them locate the talent needed to expand their business beyond internet poker.

Caesars Entertainment

Caesars Entertainment is the majority owner of Caesars Interactive, which is the company that is the majority owner of the World Series of Poker brand.  Caesars Entertainment already operates an online poker room under the World Series of Poker brand in the UK on the 888 Network.  Caesars and 888 have already partnered in Nevada where Caesars has already received an interactive license.  It is a tossup as to whether the World Series of Poker brand will be more widely recognized than PokerStars, but Caesars will have distinct marketing advantages.

First, Caesars Entertainment owns four properties in Atlantic City.  This gives their brands wide recognition with casual players.  They have a database of players from all of these casinos that dates back decades.  These players are more likely to play in the online casino, but they also could add recreational money to online poker player pools.

Another advantage is that Caesars Entertainment has for years required all World Series of Poker players to sign up for events using their Total Rewards player’s card.  This was no accident; this was Caesars planning for this day to eventually come.  Caesars Entertainment has contact information for a number of World Series of Poker players in the tri-state area to lure to their new World Series of Poker online site.

Boyd Gaming

Boyd Gaming owns 50% of the Borgata, the highest grossing casino in Atlantic City.  Boyd Gaming also owns seven Las Vegas casinos and a number of regional casino properties.  Boyd Gaming has already received an interactive license in Nevada.  The company has entered a partnership with bwin.party and MGM Resorts in Nevada.  MGM Resorts is also Borgata’s 50% partner in Atlantic City, although MGM has run into licensing issues in New Jersey and may have to leave the market.  If MGM does in fact leave the market, this could create an issue with this three-way partnership.  Boyd Gaming may have to find a new partner to enter the New Jersey interactive gaming market if MGM cannot resolve its dispute with the New Jersey Casino Control Commission.

MGM Resorts

As mentioned, MGM Resorts may have issues even retaining their New Jersey license.  If they are forced to sell their stake in Borgata then they will have no chance of entering the market and may also create problems for their partners Boyd Gaming and bwin.party.

Golden Nugget

Golden Nugget currently operates a play money online poker room through its partnership with Bally Technologies.  Both Golden Nugget and Bally Technologies have received a Nevada interactive license.  This partnership could easily launch in New Jersey as well upon proper licensing by the New Jersey Casino Control Commission.

Trump Taj Mahal

Trump is shedding its Trump Plaza property this year for just $20 million, provided the sale does not fall through.  Trump will still own Trump Taj Mahal.  Donald Trump announced his interest in getting into the online gambling business back in 2011.  The announcement did not include any well known international or software partner.  Still though, expect Trump, who is an advocate of online gambling, to find a way to enter this new market.

The Rest

Meruelo Group, Resorts, Revel and Tropicana have made no major announcements about their potential online gambling business.  Meruelo Group has yet to close on the Trump Plaza.  Tropicana is owned by investor Carl Icahn and its casino win puts it in the middle of Atlantic City’s twelve casinos.  Resorts and Revel typically rank 10th and 11th in terms of casino win.  Resorts exited bankruptcy two years ago.  Revel is on its way there after a failed launch on their multi-billion dollar property.  Rumors are that Revel is for sale so that may change the online gambling game in Atlantic City as well.  None of these properties seem well positioned to compete with the other Atlantic City properties without partnering with them.

Although online gambling could be at least a year away, ownership changes and partnerships between casinos and software suppliers are likely to start rolling out of New Jersey on the news online gambling has been signed into law.

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