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The impact of online gaming on state coffers isn't yet known, but lobbyists say it won't cannibalize casino revenue. People 'have refrigerators full of food, yet we still go to restaurants,' says William Pascrell III.
The impact of online gaming on state coffers isn't yet known, but lobbyists say it won't cannibalize casino revenue. People 'have refrigerators full of food, yet we still go to restaurants,' says William Pascrell III. - (THINKSTOCK)

It may be at least a year before New Jersey's online gaming network is in full bloom as a revenue source for the state's cash-hungry casino industry. And how the new platform will boost business in Atlantic City is still anyone's guess.

Joe Lupo, senior vice president of operations at the Borgata, said Internet gaming primarily is "about being able to touch more consumers with the technology" — namely, those who don't gamble at its brick-and-mortar resort. The city's most dominant casino is basing its vision on the experience of its partner, Gibraltar-based BwinParty, which operates online gaming platforms across the globe.

"Our knowledge of the European model is that there are a lot of customers that have a much smaller bankroll and play a different type of game," Lupo said. "We're really looking forward to the opportunity to speak to more customers."

Lupo said it was "too early to tell whether they'll become bricks-and-mortar customers," but other companies have grander designs.

William Pascrell III, an attorney for PokerStars, said the company plans to use its platform as "a way to attract younger gamers" who will want the dining and entertainment options of a full-scale resort. PokerStars, operated by The Rational Group, is partnering with Resorts Casino Hotel on Internet gaming.

That strategy could include everything from offering a hotel package to the winner of online poker tournament to using player data to tailor the casino's promotions, he said.

"We're going to be using it as a marketing tool to bring people and bodies back to Atlantic City," Pascrell said. "The question becomes, do the casinos utilize it in a smart way?"

The state hopes to go live with Internet gaming by late November, but estimates of its revenue impact have varied greatly. A report by Wells Fargo in January said online gaming could generate between $650 million and $850 million in annual revenue in New Jersey, though the state's launch would start in the middle of the fiscal year. Other projections have put first-year revenues as low as $35 million.

Pascrell dismissed concerns that online games will cannibalize Atlantic City's already-dwindling gaming revenue.

"We're social animals," he said. Consumers "have refrigerators in our kitchens full of food, yet we still go to restaurants."

And David Rebuck, director of the state's Division of Gaming Enforcement, floated the best-case scenario: online gaming will bring back the patrons who have abandoned Atlantic City for casinos in nearby states. The law requires players to be inside the state's borders to play.

"For the convenience gambler, it's probably going to be just as easy for them to gamble on the Internet in New Jersey as it will be for them to travel to a casino," Rebuck said.

E-mail to: joshb@njbiz.com
On Twitter: @joshburdnj

Joshua Burd

Joshua Burd

Josh Burd covers real estate, economic development and sports and entertainment. Before joining NJBIZ in 2011, he spent four years as a metro reporter in Central Jersey. His email is joshb@njbiz.com and he is @JoshBurdNJ on Twitter.

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