The Borgata Casino in New Jersey, in its joint venture with Boyd Gaming in the regulated online gambling sector have posted Q1 2014 losses of $3.2 Million, however state that the majority of that loss was incurred through start up costs and $2 Million spent on marketing campaigns. There is no panic regarding the numbers as losses were expected and Boyd does in fact have a good share of the New Jersey online market. The two Boyd and Borgata sites generated a total of $7.7 Million up to March 31st and there is hope that the venture will be a profitable one by the end of 2014, as Boyd Gaming CEO Keith Smith explains, “The loss in the first quarter was primarily driven by the start-up costs and launch advertising, which is fairly typical in a new business. A lot of advertising happened in the first quarter. We would expect that by the end of the year that this will be cash flow neutral or profitable.”
Most companies have indeed pointed to set up and marketing costs as their largest outlays since online gambling became regulated in the state in November of last year, with the largest issue now being that of processing deposits. Many US banks still refuse to process credit card transactions to the regulated gaming sites and many online operators are now pushing their own prepaid cards and offer e-wallet alternatives such as Neteller and Skrill. There is no short term solution to this issue, and it is seen as the major roadblock to a fruitful online gambling venture in the Garden State.