Happy Thanksgiving from GGB; Newsletter Returns December 4

Borgata COO: Online Gambling in New Jersey is Exceeding Expectations

Tom Ballance (l.), COO of Atlantic City’s Borgata Casino Hotel & Spa says that New Jersey’s foray into online gaming is off to a great start and is not hurting Borgata’s brick-and-mortar casino. In fact, databases show that most online gamers rarely set foot in the actual casino.

Borgata COO: Online Gambling in New Jersey is Exceeding Expectations

The Borgata Casino Hotel & Spa is one of the clear winners in the early days of online gaming in New Jersey and the casino’s president and COO says the numbers are exceeding expectations.

In an interview with CNBC’s Squawk Box, Tom Ballance said that Borgata has seen more than 20,000 online accounts opened by gamblers—the state’s casinos as a whole have seen nearly 150,000 accounts opened—and most of those customers rarely gamble in person at the Borgata’s brick-and-mortar casino.

“Borgata was uniquely positioned to be at the forefront, primarily because of efforts by our managing partner, Boyd Gaming Corporation,” Ballance told Squawk Box. “Boyd’s strategy is to engage in online gaming nationwide. We weren’t out hunting for a service provider, when others were. We were all set up and ready to go.”

More importantly, online gaming seems to be bringing in new customers to the Borgata brand.

“When we match up databases, the great majority of players who were playing online have not been to Borgata in well over a year,” he said. “And the vast majority have made fewer than two trips in the past year. So it’s a different customer. It also skews more male than the conventional brick-and-mortar customer.”

When online gaming in New Jersey was first proposed, many questioned if the move would siphon off gamblers that usually play in person at brick-and-mortar casinos. The state will release its first report on online gaming revenue later this month.

Ballance also answered critics that say online gaming will lead to more problem gambling.

“Online we actually have more controls,” he said. “You don’t extend credit online. You’ve got to fund your account somehow—through your checking account or through a credit card.”

Ballance also commented on Atlantic City’s recent hard times, which has been brought on by a rise in competition from new casinos in neighboring states.

“You have to provide a product and service that’s worth driving 90 minutes for instead of 15 minutes,” he said.

In 2013, Borgata did just that, he said.

“Our first 11 months of 2013, which is all that we disclosed so far, is up from 2012. That’s only the second time revenue has been up in the last seven years. We were up about 3 percent at the end of the 11 months. And that’s really encouraging for us.”