Betfair’s Breon Corcoran Has Dealt with 3 Atlantic City Casinos: Golden Nugget, Caesars, and Trump Plaza
Betfair has closed its New Jersey online gambling portal with Caesars Interactive this week. The company’s US peer-to-peer poker site generated only $50 this year, so Betfair has decided to try a different strategy.
The move was expected, because Betfair recently signed a partnership deal with Golden Nugget, one of the few Atlantic City casinos which had not open an igaming portal. The arrangement with Caesars Interactive had been a temporary expedient, after Betfair had to migrate its website from servers belonging to Trump Plaza.
Trump Plaza closed its doors on September 16, though the US-facing Betfair site remained online for several weeks, due to Trump Plaza’s continuing operations and the DGE’s permission. The poor performance of the online poker side of the business is therefore mostly associated with Trump Plaza’s problems. When Betfair could no longer operate on the Trump Plaza servers, Caesars Interactive agreed to host their platform on their servers for a time.
Betfair’s U.S. Casino
The online casino operation by Betfair for the New Jersey market had generated $6.6 million. Because the site had shown a nice profit–though it’s among the least successful of the 2013 New Jersey online gaming launches–Betfair was able to convince Golden Nugget to get aboard. Golden Nugget is owned by a regional gaming company, so it has been more hesitant about expending the resources to launch an online presence.
Ultimate Poker
Two months ago, Ultimate Poker left the New Jersey gaming market altogether. At the time, Ultimate Poker claimed its New Jersey partner, Trump Taj Mahal, had stopped paying their company profits from the online business. Ultimate claimed they were owed $2.2 million in back payments and simply could not continue operations.
Last month, Ultimate Poker closed its Nevada online gaming portal, too. Ultimate Online is owned by the Ultimate Fighting Championship (UFC) owners, the Fertitta Brothers. They also own the land-based casino company, Station Casinos, which is based out of Las Vegas. With Ultimate and Betfair closing down their sites, the Trump Entertainment experiment with online gambling is over. While Trump Plaza is already closed, Trump Taj Mahal is set to close in the middle of December, if funding cannot be found. At present, majority owner Carl Icahn is continuing to negotiate with Atlantic City leaders and union workers, in hopes of signing a workable partnership.
New Jersey Online Poker
Only two of the licensed Atlantic City online casinos have been able to generate revenues through their online poker sites. Borgata and Caesars, which operate 4 online brands in the New Jersey market between them, each have had successful business with their online card rooms. They represent the casinos in Atlantic City with the most resources, so their online operations have been the most elaborate.
More important for online poker, they have been able to establish better card player communities. Borgata Online has a reputation for the best gaming interface, while Caesars Interactive pools the playing community from several online portals. Before the Showboat Casino closed in September, Caesars Entertainment owned four casinos in the city. With the three casinos remaining, Caesars has been able to draw a substantial enough community to make the business model work. Online poker sites need to offer many types of games, including ring games and tournaments, so they require larger customer bases.
The results from the first year of online gambling in New Jersey were lackluster. Before the rollout began in late-November 2013, Governor Chris Christie had predicted the online gambling industry could net $1 billion a year for the state’s gaming companies. In the first year of operations, the gaming industry netted something closer to $110 million–just over 10% of what Governor Christie had suggested.
Technical Issues
Gaming executives blame tech support problems and issues with credit cards. The geolocator technology used to assure gamblers were inside the state of New Jersey didn’t always work, so players near the state boundaries often registered that they were in Pennsylvania or the state of New York.
That problem was fixed eventually, but the issue with VISA and MasterCard payments remains. Many banks which issue VISA and MasterCard credit cards do not trust that gambling is legal. Thus, when a gambler tries to make a payment with their credit card, the transaction declines. This has dampened enthusiasm, because many people will not try a second payment method, if their preferred method doesn’t work. These people tend to believe something is wrong with the website, so many customers have been driven away. Less than 45% of VISA payments were accepted, while only 75% of MasterCard deposits worked.
