The rapid contraction of Atlantic City is poised to claim another casino.
Trump Plaza delivered layoff notices to its 1,000+ employees this week.
But unlike the other casualties of the economic carnage that has remade the Atlantic City boardwalk, Trump Plaza holds a permit to offer online gambling in New Jersey. The casino does so in conjunction with its partner Betfair via BetfairCasino.com.
So if the Trump Plaza closes, what happens to Betfair in New Jersey?
If you’re not a casino or aren’t partnered with a casino, you can’t operate an online gambling site in New Jersey.
Per state law, only land-based casinos can hold an Internet Gaming Permit in New Jersey. All regulated sites in NJ operate under an IGP. Companies like Betfair act as partners to the state’s casinos and work under a lower level of licensing.
If Trump Plaza closes, their IGP dies along with the casino. That leaves Betfair facing a decision: leave New Jersey, or find a new partner.
Betfair has invested a substantial amount of money into the New Jersey market. And the company is also involved with legal online wagering of another sort in the state via 4NJBets, a site that facilitates betting on horseracing.
In short, an exit seems highly unlikely.
There are only a handful of realistic partnership options for Betfair. And Betfair doesn’t have much leverage in negotiations:
That combination of circumstances could lead to a deal where Betfair pays through the nose to stay in New Jersey, leaving the company with even less ammo for building market share.
One silver lining for Betfair: The NJ Division of Gaming Enforcement recently issued a regulatory update that allows IGP holders to utilize multiple platforms under a single IGP.
Prior to that update, IGP holders could operate up to five unique URLs under a single IGP, but all of the brands had to utilize the same underlying platform.
With that restriction lifted, Betfair’s chances of sticking around in New Jersey increased dramatically.
One significant hurdle: the inability to utilize the Trump Plaza name in association with the online product. Donald Trump retains that right. That cost Betfair and Trump Plaza the opportunity to leverage land-based trust into an online player base as Borgata so successfully did.
That hurdle contributed to the spectacular failure of Betfair’s NJ online poker site, which has generated a total of $48 in rake in 2014.
The room suffered from glitches, low player interest and confusion regarding its status along its swift and brutal path to irrelevance.