New Jersey has been trying to be proactive when it comes to the online casino industry, as they feel it’ll help offset the decline in players actually getting up, leaving their houses and going to the land-based casinos. Because of that, New Jersey has had major problems in the recent past with having to shut down casinos – specifically, in Atlantic City. Therefore, the online casino operators have had to step up and the Borgata has been one of the best in adapting to the online world.
A controlling stake in the Borgata was purchased by MGM Resorts International, one of the pillars of the hotel and casino industry. They are hoping to give the Borgata an even bigger boost. Their brand name has a lot of cache in the world and that is going to help them tremendously. The Borgata actually brought in almost $46 million of revenue from their online casino in 2016, which is an increase of 3%. However, Caesars, Golden Nugget, Resorts and Tropicana all had larger increases in their online gaming revenue and their growth side-by-side with Borgata’s is a bit of a concern. Not only was it better, it also cut into Borgata’s revenue.
While those casinos are all still behind Borgata when it comes to money brought in by the old-fashioned brick-and-mortar casinos, any business would be nervous seeing their competitors closing in. The online poker part of the Borgata online casino was where they were hurt the most as its revenue fell almost 30% last year. MGM will be hoping to turn that around.
Golden Nugget is making up ground with the Borgata in a hurry and they’re doing so despite only offering an online casino whereas the Borgata offers an online casino as well as online poker. When it comes to just the online casino, Golden Nugget actually beat the Borgata by about $4.4 million, which is about a $6 million swing from the previous year when they trailed the Borgata by $1.5 million. In the latter half of the year, the Golden Nugget’s online casinos actually beat the Borgata’s online casino and their online poker as well.
MGM will be hoping to change those trends around as they have a brand that virtually everyone recognizes. They might even decide to renovate and change around the property to follow the template of the MGM Grand in Las Vegas and the newly-opened MGM National Harbor in Maryland. The latter opened in December and has been a massive money-maker so far. It’s unclear what they plan to do with the Borgata as of yet, but if they follow the MGM National Harbor approach we could see some celebrities get involved with partnerships for restaurants and retail.
MGM saw a good opportunity to buy into a relatively decent property with a strong online business, and now they’ll look to turn around the foot traffic and get more people inside. As they say in real estate, it’s best to buy in a cold market and that’s why this investment is viewed as shrewd: MGM is buying in on the cheap. MGM is betting on the fact that the state will help stabilize Atlantic City and the boardwalk will eventually thrive once again.