Resorts AC Online Casino To Launch In February

Online Casino Launch Could Power Profit Surge For Resorts Atlantic City

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Resorts AC will open the doors on their regulated online casino in New Jersey later this month.

That’s after the company announced yesterday they had secured the necessary approvals from the New Jersey Division of Gaming Enforcement.

Company joins growing, but crowded, market

New Jersey’s online casino presents both challenge and opportunity for Resorts.

Let’s start with the good news:

  • Online casino is growing in New Jersey. Last month the state’s operators booked a $9.2m win, up from $6m the previous year. And customers continue to create some 25,000 new accounts each month.
  • Resorts’ land-based take is relatively modest (est $139mm revenue in 2014, $2mm profit in 2Q14), so any meaningful profit from online gambling will move the needle.
  • Because of this, Resorts is likely to take land-based / online integration more seriously than some of its competitors, which could provide a competitive advantage.
  • Brand has been important in New Jersey’s market, but customers have proven it’s not everything to them by pushing millions in revenue through non-land based brands like Betfair.
  • The payment situation in NJ’s market – thought to be a bottleneck for growth – should improve dramatically in the first half of 2015.

And then the bad:

  • While casino revenues are reasonable and growing, that revenue pie is contested by almost a dozen unique brands.
  • Competition for casino customers is likely to intensify as operators shift resources and attention away from poker (shrinking / stable) and toward the growing casino vertical (growing / dynamic).

Estimating the opportunity

On balance, Resorts and its online partner SNG Interactive should expect $5-$7mm in revenue for 2015 (assuming February launch).

You can make a bull case closer to $10mm if payments improve dramatically and PokerStars launches by mid-year.

View complete historical revenue data by operator here.

Product to bring 40 new games to NJ market

The Resorts online casino will be powered by SNG Interactive, a joint venture of Sportech and NYX Gaming.

That partnership was first announced in June 2014.

As for the product:

  • Suite of over 120 games.
  • Table games like blackjack and roulette.
  • Forty games / variants new to the New Jersey market.

You can read more about the platform in a presser here.

Poker not a part of the launch plan

Resorts’ online launch is casino only, with no online poker product planned.

New Jersey online gambling regulations allow casinos to partner with multiple brands and platform providers. Resorts is separately partnered with PokerStars in NJ and will bring online poker to market under that relationship – if and when PokerStars clears the necessary regulatory hurdles (more on that below).

PokerStars partnership remains a question mark

PokerStars oft-delayed entry into the New Jersey market has been the subject of increased discussion as of late thanks to a series of reports alleging ties between said delays and Gov. Chris Christie.

Resorts has had little to say on the matter over the last few months.

But a successful launch of a PokerStars NJ online poker site – especially if accompanied by a Stars-branded live poker room at Resorts – could combine with the Resorts online casino product to generate a valuable stream of revenue (and profits) for Atlantic City’s oldest casino.

Interestingly, Resorts’ online casino partner NYX Gaming has a close corporate relationship with Amaya, who acquired PokerStars in August 2014.

- Chris is the publisher of Grove also serves as a consultant to various stakeholders in the regulated market for online gambling in the United States.
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