Trump Plaza Closing Imperils Betfair New Jersey Plans
The scheduled closing of two Trump casino properties in Atlantic City by parent company Trump Entertainment Resorts, Inc. has unleashed a sweeping wave of secondary economic effects, including imperiling the tenuous toehold that UK online gambling giant Betfair has established in New Jersey, and by extension the United States as well. The Betfair – New Jersey pairing, by all appearances, is likely to end soon.
Betfair is the software partner of Trump Plaza, the first of the two Trump-branded casinos to declare bankruptcy and announce its intent to close, which it will do one week from today. That pending closure threw into question of the online-gambling site operated by Betfair on behalf of Trump Plaza, www.betfaircasino.com, and Betfair lost little time in petitioning the state’s gaming regulators to be allowed to continue operating the site once Trump Plaza itself ends its active partnership.
As reported by several major business outlets a couple of days back, Betfair will be allowed to continue operating the site in the short term, while the state and Betfair explore solutions that might allow Betfair to stay in New Jersey.
“The division will consider input from all involved parties to ensure a smooth transition as Trump Plaza winds down its operations and as Betfair continues its iGaming operations in the state,” wrote New Jersey Division of Gaming Enforcement Director David Rebuck in a brief e-mailed statement. “They want to remain fully functional and stay in New Jersey, and we will work with them to do that.”
What that statement doesn’t get into is that the DGE has already filed a countering petition against the one filed by Betfair which seeks to allow the betfaircasino.com site to remain in operation, and that Betfair was operating in the state only under the continuance of a transactional waiver in conjunction with its ongoing application that allowed the Trump Plaza-related online site to begin its online operations. Though the DGE has acquiesced to Betfair’s legal petition in the short term, there is no sure indication that the state intends to allow Betfair to remain active there over the long haul — particularly amid a contracting state gaming market where the surviving casinos are likely to fight hard over the remaining pieces of a reduced gambling pie.
Most of the news briefs issued to date on the topic don’t delve fully into the situation, though the filing and publication of petitions and directives to date show a situation deep in flux. The DGE’s 13-page Director’s Order regarding the closing of the Trump Plaza provides the brief statement that offers the fodder for most of the news pieces published to date, and that’s just a couple of paragraphs at the very end. The complete excerpt:
WHEREAS, Trump Plaza, as the holder of a valid Operation Certificate, holds an Internet gaming permit, issued pursuant to N.J.S.A. 5:12-95.21a. Trump Plaza represents that it is exploring the economic, legal and practical feasibility of continuing its relationship with its internet gaming provider; and, the Division having considered the law and the submission of Trump Plaza;
IT IS ORDERED that Trump Plaza’s Internet gaming provider is permitted to continue Internet gaming operations until the Division directs the surrender of Trump Plaza’s Internet gaming permit and Operation Certificate provided the following conditions are satisfied:
I. Trump Plaza, in cooperation with its Internet gaming provider, shall provide to the Division’s Revenue Certification Unit an audit of its revenue on September 8, 2014, and weekly thereafter;
II. Trump Plaza, in cooperation with its Internet gaming provider, shall provide to the Division a daily attestation that the bank account required by N.J.A.C. 13:69O-1.3(j) sufficiently exceeds the balance of patron Internet gaming accounts to ensure the safekeeping of all patron funds; and
III. Trump Plaza, in cooperation with its Internet gaming provider, shall provide the Division with a list of safeguards and procedures employed to ensure the security and integrity of the Internet gaming system and associated patron data located within that system subsequent to the cessation of gaming operations on or before September 8, 2014; …
The technical statutory references in the above are designed to clarify that the state of New Jersey is demanding that sufficient bank-account funds be maintained to cover all player bankrolls that exist in the Trump Plaza / Betfair online network. Besides that, the bulk of the news reports to date pick up the line that Betfair is allowed to continue operations, and thereupon drop the news-reporting ball. But there’s a whole lot more to it than that.
All of the above hinges upon the active cooperation of Trump Plaza, not of Betfair, and all indications are that with the subsequent filing for bankruptcy by the other Trump Entertainment property, Trump Taj Mahal, that Trump Entertainment Resorts Inc. plans to pack up its New Jersey casino-business ball and head on home. And that’s what’s led to to a subsequent petition being filed by Betfair (published on September 4th by the DGE), and the DGE’s apparent opposition to that petition, which hasn’t been reported on much to date.
Events have moved on. Betfair appears to have filed its petition on September 3rd, and the DGE responded with its own declaration and supporting order on the following day. The DGE’s statement is indeed a supporting of Betfair’s filing of a petition to be able to continue short-term operations, but it is only that — an acknowledgment that Betfair has some short-term, legal business interests that must be addressed. The DGE even protests that Betfair’s rights are any more important than those of Trump Plaza’s other business partners or its thousands of newly disenfranchised employees.
According to the DGE’s September 4th statement, “the Division would oppose the request for intervention but would not oppose Petitioner [Betfair] being granted permission to participate only in the form of written submissions.”
The directive includes an adopts in its entirety the formal opposition, written by NJ Deputy Attorney General Sara Ben-David in response to Betfair. An excerpt from that statement makes it clear that New Jersey believes Betfair has only limited interest, which calls into question exactly how long the betfaircasino.com site might remain in operation. From the statement:
The Division does not challenge that Petitioner has an interest in that portion of Trump Plaza’s petition, filed August 25, 2014, relating to the alteration of its Operation Certificate and the surrender of its Casino License. As reflected in your order, dated August 29, 2014, Petitioner may continue Internet gaming operations until the Division directs the surrender of Trump Plaza’s Internet Gaming Permit and Operation Certificate.  However, there is nothing unique or special about Petitioner’s interest that would elevate it above many other businesses affected by the shutdown. Furthermore, Petitioner’s intervention would not aid “measurably or constructively” in this matter where the chief issue is whether Trump Plaza’s proposed plans provide for an orderly shutdown and comply with all relevant regulations governing casino operations. Petitioner has notified the Division that it has demanded the release of certain funds which are allegedly due to Petitioner. However, the Division is not the proper forum to consider such contract disputes, which are within the purview of the court system, and Petitioner should not be permitted to intervene to gain leverage on this issue. At best, Petitioner’s interest is economic and thus insufficient to merit intervention.
Since the above was adopted in its entirety by the DGE, there’s nothing to indicate that Betfair will be allowed to operate the betfaircasino.com site in New Jersey once the official surrender of the Trump Plaza casino license is official. That will likely take a few weeks, and at that point, or prior to it, Betfair may well be ordered to institute an orderly refund process to players who are maintaining an active balance in their online accounts.
As Betfair woefully noted in its own petition, Trump Plaza isn’t even answering the phones. From the company’s statement:
Betfair Interactive has made repeated written requests for information from Trump Plaza’s senior management on Trump Plaza’s plans for the casino, including once the closure was formally announced requesting in writing a face-to-face meeting with senior management in order to discuss the implications of the impending closure of the Trump Plaza on the internet gaming operation. To date, Trump Plaza has failed to even respond to Betfair Interactive’s requests.
Betfair is also not in possession of any active New Jersey license themselves. Instead, they received a six-month transactional waiver in November, 2013 which allowed the online site to become operational, and a six-month extension of that waiver was granted in May.
This means that the transactional waiver for Betfair Interactive will expire around November 7th, leaving the company with no active partnership in the state — assuming Trump Plaza’s casino operations license has been surrendered by that time.
It’s thus hard to understand how Betfair will remain in the New Jersey market come November, or sometime sooner, absent an all-new deal with another New Jersey casino operator. The problem there is that all the remaining Atlantic City casino owners already have deals in place with other software providers. Such deals aren’t exclusive — Caesars Interactive, for instance, has deals with both 888 and Amaya in New Jersey — but it’s hard to see where any new deal has to be done just to allow Betfair a path to remain in the state. (Nevada-based Ultimate Poker also faces a similar dilemma following the planned closing of the Trump Taj Mahal in November.)
For that reason, the numerous stories stating that Betfair will be allowed to continue operations in New Jersey are technically correct, but factually misleading. This appears to be only a short-term situation allowing the repatriation of funds to Trump Plaza’s and Betfair’s online New Jersey customers. After that, with the Trump name gone from the New Jersey casino scene, Betfair will likely be left on the outside looking in.