One-time start-up costs have kept Boyd Gaming’s online gambling sites in New Jersey—through the Borgata Hotel Casino & Spa—in the red, but Boyd officials expect a profit by the end of 2014.
Boyd Gaming CEO Keith Smith, speaking at a conference call with reporters, said he expects online gaming in New Jersey “will be cash flow neutral or profitable by the end of the year.”
Boyd lost $3.2 million through online gambling in the first quarter of the year.
Smith said the loss came from one-time costs associated with the launch of Borgata’s online poker and casino brands.
“Like any startup business, we invested heavily in marketing and advertising,” Smith said. “Of the $3.2 million operating loss reported by our online business during the quarter, about $2 million was due to onetime nonrecurring expenses.”
Smith said he doesn’t think a reduction in marketing costs will hurt the sites, which have taken the early lead in the New Jersey online gambling market.
“I think a lot of our market share that we’ve gained is not due to the $2 million or so that we spent in marketing and startup advertising. It really has to do with the power of the Borgata brand,” Smith said.
“So we’ll continue to market and advertise in a prudent fashion where we think we need to, when we think we need to and provide the right incentives to our customers to keep them on our site,” he said. “But we don’t think kind of pulling back to a more normal run rate is going to impact our market share or our ability to continue to run a good business there.”
