NJ Online Poker Leader Loses $3.2m In Q1 2014May 6, 2014 5:39 pm
The Borgata Hotel Casino & Spa, which is co-owned by Boyd Gaming, is currently the market leader in New Jersey’s nascent online gambling industry with its platform partner bwin.party helping to provide a top quality product via its NJ.PartyPoker.com and BorgataPoker.com brands.
Despite generating $4.4 million in revenues for March alone, representing 37% of The Garden State’s total igaming market, the operation still managed to lose $3.2 million for whole of Q1 2014. Nevertheless, Boyd Gaming CEO Kevin Smith says he is confident the situation will be significantly improved in the near future, with online gambling cash flow expected to be “neutral or profitable by the end of the year.”
Furthermore, CEO Kevin Smith was keen to point out that $2 million of its Q1 losses were accounted for by nonrecurring expenses, such as the costs incurred starting up the new business, as well as the money it subsequently spent launching its initial advertising promotion. Kevin Smith said Boyd Gaming would now be taking a more measured approach to marketing expenditure, stating:
“We’ll continue to market and advertise in a prudent fashion where we think we need to, when we think we need to and provide the right incentives to our customers to keep them on our site. But we don’t think kind of pulling back to a more normal run rate is going to impact our market share or our ability to continue to run a good business there.”
The company has plenty of reasons to be confident its market share will not suffer, either, as a recent survey conducted by Commercial Intelligence showed the Borgata Hotel Casino & Spa was the state’s favourite land-based casino with 34% of the votes, and second favourite online brand with 63% of the votes behind Caesars (78%).
“I think a lot of our market share that we’ve gained is not due to the $2 million or so that we spent in marketing and start up advertising. It really has to do with the power of the Borgata brand,” explained Kevin Smith.
The company is also set to benefit from the continuing growth reported for NJ’s online gambling market, with the state’s igaming revenues already significantly higher than the $7.4 million it generated in December 2013. In March, for instance, the state’s six online gambling websites generated a combined $11.9 million in revenues, an improvement of 15% compared to the $10.3 million it took in February.