MGM Resorts to Launch Its First Real Money Online Casino and Poker Site
Internet gambling has been a boon for Atlantic City's casinos, and few have benefited more than MGM Resorts' (NYSE: MGM) Borgata Hotel Casino & Spa, which until recently was New Jersey's biggest operator, both on the ground and online. But as additional gaming websites go live, Borgata's crown has slipped and is now the state's runner up.
MGM is seeking to reclaim the title. Later this year, its playMGM service will go live with over 300 casino games, including progressive jackpot slots, multiple tournaments, and cash-play poker. It's a landmark move, because it is MGM's first branded site that utilizes real-money online casino and poker.
Image source: Borgata.
Evengambling is being saved by the internet
The only reason Atlantic City's casino operators were able to end 2016 in the black was the boon of online gambling. It marked the first time in a decade the casinos saw revenue rise year over year.
MGM's Borgata still reigns supreme among the state's surviving gambling halls, and year to date, its gross revenue exceeds $237 million, a 7.6% gain from last year and more than twice as much as the next closest competitor -- Harrah's Resort -- which generated over $114 million. Overall, MGM realizes 7% of its net revenue from Borgata.
Atlantic City seems to have right-sized itself after five casinos closed their doors in as many years as surrounding states legalized gambling. With competing casinos in Connecticut, Pennsylvania, and Maryland, the Garden State hemorrhaged gamblers, and Atlantic City struggled.
But internet gambling has changed all that. Legalized in 2013, New Jersey's online casinos and poker sites crossed the half billion dollar revenue mark in February and today, the tally stands at more than $554 million. They have also paid over $83 million in taxes.
Image source: Getty Images.
Betting bigwith Borgata
Borgata has been the winningest of the five casinos that operate online. Since its launch, Borgata has internet gaming win of $156.8 million, ahead of the $120.7 million from Caesar's Entertainment, which also owns Harrah's and Bally's (though the latter doesn't have an online presence).
Last year, MGM Resorts bought out the 50% stake in Borgata that had been owned by Boyd Gaming, which sought to build up its regional gaming operations instead. Since opening its doors in 2003, Borgata has been the star of Atlantic City. But in recent months, the online casino operations of Golden Nugget hadsurpassed Borgata. Through April, Golden Nugget's internet win is $21.5 million, some 34% above Borgata's $16 million take.
That was likely the result of Golden Nugget adding SugarHouse to its roster of providers last September, using the casino's online gambling license and attracting players with over 200 titles. Remarkably, despite online poker often getting the most attention, Golden Nugget doesn't offer peer-to-peer poker, where you play against people and not just a computer -- it only has table games.
Armchair betting
With the addition of playMGM, there will be a total of 21 online gambling sites in New Jersey. MGM ispartnering with U.K.-based GVC Holdings, which has provided the software and support services for the Borgata, and playMGM will be the sixth site operating under the Borgata's license. Online casinos in the state have to be partnered with a physical casino.
By adding a new site with a proven partner, but doing so under its own brand name, MGM is looking to once again make its Borgata Hotel Casino & Spa the premiere online operation in New Jersey.
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