As is normal with business, success in one branch gives birth to expansion into other areas. This is what is currently going on with Borgata. The performance of Borgata Hotel Casino & Spa in Atlantic City has been impressive; no wonder they are looking for another market to conquer. New Jersey is their latest frontier and for obvious reasons; it is a fertile market that other key industry players have already joined.
For Borgata, entering a market under full backing of a popular gaming developer giant is an advantage that they are not letting go. For the gambling giant, the more than 168% year-over-year revenue increase reported for the NJ casino market is the bait for their interest. This is in addition to reports by the Division of Gaming Enforcement that state that $208.2 million earned from online wins made up 36% of the casino’s revenue for 2020.
Based on what Borgata posted as revenue in 2020, it is obvious that it was a profitable season for the gambling institution. The previous year, 2019, managed revenue amounting to $77.8 million for the casino. This is such an impressive record of growth at a time when the world is undergoing a pandemic so heavy that most businesses required closure from the public.
Players react to Borgata’s closure
Although Borgata did not close its doors to patrons out of their own will, players who frequented their brick-and-mortar casino were enraged. To a large extent, the closure was for the players’ own protection given that Covid-19 was in full force. The more than 100 days of confinement to their homes and controlled environment was the fuel that sparked the rage.
While the effects of the pandemic were understood to mean that businesses would lose out of revenue, many employees who got laid off in the process suffered. Borgata staff was also affected.
According to a statement issued by Melonie Johnson, the President and COO of Borgata, the Covid-19 related closure enraged players because it shut them off from an activity they enjoyed. This is evidence that the gambling market in New Jersey is bigger than any casino operator would be able to handle on their own. While they continue to run their operations, many operators are now looking to venture online to say relevant to the changing times.
Johnson further attests to the fact that online casino operations are quite profitable and are not affected by movement restrictions. Since players can access sites from a majority of internet enabled devices, the luxury of gambling happens at their convenience. Speaking in an interview by Yahoo! Finance, Johnson is cognizant to the fact that brick and mortar casinos are being phased out by the emerging online models.
Borgata online growth is driven by BetMGM
As a betting services provider, Borgata casino works with various gaming brands to provide players with a betting experience that meets their ever-changing demand. In their New Jersey gaming license for instance, brands such as BorgataPoker, BorgataCasino, PartyCasino, PalaCasino, and PartyPoker have been listed as technology partners. Another big name and which most consumers identify with is BetMGM.
As the gaming development wing of the MGM Resorts International, BetMGM has a wide range of games on the Borgata casino site. This is not shocking because Borgata is owned by MGM Resorts International. According to PlayNJ, a large proportion of revenue generated by Borgata is made from BetMGM offerings.
Other games which contribute the casino’s income are provided by PartyPoker, another partner of the Borgata umbrella body. The Vice President of gaming at BetMGM, Mathew Sunderland recently told PlayNJ that the growth which Borgata was currently experiencing is not by accident; but by design. It is also true that some of the growth was as a result of the Covid situation.
For Borgata, previous growth even over the pandemic period just goes to show that its plans to grow have been successful. For Sunderland, 2020 was a fruitful year for the casino and a result of hardwork from the casino staff. Before Covid-19 happened, casinos majorly grew out of interest from the players to make money.
Sports betting and online casino games provide platforms on which players can pass time without leaving their comfort zones. The timing therefore, for New Jersey and other states to open up their markets to gambling is rather timely – it is the most natural response in the current internet revolution.
Looking at the financial records for Borgata Casino for the last 5 months, it is clear that the company is on an upward rise. From revenue of $19.7 million in August which was an increase of 177.2% from the previous month, the casino has not experienced a dull month. By the end of December 2020 and with revenue of $27.1 million the year has clearly been profitable for Borgata.
Mutual growth for online gambling providers
On one hand is Borgata, a casino services provider and on the other is BetMGM, a betting offerings provider whose games are appreciated by many casino clients around the world. This partnership is what the industry is witnessing as enhanced customer retention that in turn spikes the revenue. The brick and mortar establishment excites new players that have never been to a casino before while the online wing of the partnership keeps the gambling spirit under wraps when a visit to a casino cannot happen.
While every casino executive is looking forward to a return to normalcy past the Covid-19 pandemic, Johnson admits that Borgata has been a great beneficiary of the pandemic restriction. He is hopeful that a vaccine with reassure their customers to back to casinos. After the pandemic, gambling businesses are looking to reap both from the physical and online components of casinos in equal measure.
The pandemic period has been reported by many casino businesses as great for business. For those like Borgata that has the muscle to scale beyond current operations, the market has already provided the frameworks. This has further been encouraged by various jurisdictions in the United States that are legalizing gambling.
While the idea of gambling has been alive for centuries, 2020 has brought about a new approach to making money from it. Unfortunately, only those investors who are willing to ride of the wave of changing consumer demands and trends will be able to remain profitable.