Borgata Receives First NJ Internet Gaming Permit

Borgata gaming permit

DGE Director David Rebuck (left) and Borgata President and COO Tom Ballance display Borgata’s Internet gaming permit.

The New Jersey Division of Gaming Enforcement issued its first Internet gaming permit to the Borgata Hotel and Casino yesterday. The move followed a memo last week from DGE Director David Rebuck to all 12 of the Atlantic City casinos, informing them that the DGE is still targeting November 26 as the “go-live” date for online gaming in New Jersey.

Borgata’s President and Chief Operating Officer, Tom Ballance, released a statement saying, “We are honored to receive New Jersey’s first Internet gaming permit.”

“We believe online gaming is an exciting growth opportunity for New Jersey’s gaming industry, one that will generate significant benefits for the state as New Jersey assumes a leadership role in this emerging form of gaming entertainment,” said Ballance.

DGE officials noted that Borgata had been first among Atlantic City’s 12 casinos to complete its application.

Borgata’s license is another sign that New Jersey remains committed to its November 26 launch of online gaming. Despite that commitment, questions remain over the U.S. suitability of several casino technology partners, including Borgata’s partner, bwin.party, and Rational Group, the partner of Resorts Casino.

bwin.party is the successor to PartyGaming, a company that exited the U.S. market in 2006 after enactment of the federal Unlawful Internet Gaming Enforcement Act. PartyGaming subsequently admitted to violating U.S. criminal law in various ways while servicing U.S. customers prior to 2006 and agreed to forefeit $105 million to the federal government as a result.

In March 2012, bwin.party indicated its desire to procure an interactive gaming license in Nevada by filing for a preliminary finding of suitability. A year later the suitability review still wasn’t finalized. At that time CEO Norbert Teufelberger said that bwin.party had chosen to put off operations in Nevada because “Nevada is not a huge market in terms of size”.

John Shepherd, bwin.party’s Director of Corporate Communications, confirmed today that the company’s suitability review in Nevada continues to be “ongoing”.

Whatever the reason for bwin.party’s long delay in Nevada, the company can’t retract the 2009 admission that PartyGaming violated U.S. criminal law. That admission could prove more damaging – both in Nevada and in New Jersey – than the actions of some of bwin.party’s competitors. Rational Group, whose Full Tilt and PokerStars brands operated in the U.S. for five years after passage of the UIGEA, paid similar penalties to the federal government but did not admit to any wrongdoing.

Many in New Jersey hope that online gaming will be a lifeline for the struggling Atlantic City casinos. Competing casinos in neighboring states have caused a seven-year slide in Atlantic City’s land-based gaming revenue, from a peak of $5.2 billion in 2006 to a projected $2.8 billion this year.

Note: An initial version of this article mistakenly said that bwin.party applied for an interactive gaming license in Nevada in 2012; it actually applied for a preliminary finding of suitability. The initial verison of the article also said that in 2009 PartyGaming pleaded guilty to violating U.S. criminal law; it actually entered into an agreement with the U.S. government in which it admitted doing so.

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Kevin McGrady

Legislative and Politics Beat Writer: Kevin McGrady practiced corporate law in New York City for eight years before moving to Las Vegas in 2008 to join the gaming industry. Kevin is a graduate of New York University and Columbia University School of Law.
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