Thursday March 6 ,2014 : A DISAPPOINTING QUARTER FOR THE BORGATA
Q4 revenues up at $157 million, including $2.2 million from online gambling, but performance could have been better, say execs.
Boyd Gaming, the New Jersey company that owns the Borgata, has posted a disappointing result for the casino resort’s fiscal fourth quarter, reporting total revenues of $157 million, including $2.2 million from online gambling – a 6.5 percent increase on Q4:2012, although in the comparative period the casino had to contend with major interruptions from Hurricane Sandy.
The Press of Atlantic City reports that Borgata's hold percentage in December 2013 was 11 percent on nearly $103 million, compared to a 15 percent hold percentage in December 2012 on $113 million.
Boyd officials said the disparity equated to a $3.6 million loss in EBITDA.
Company executives said they were encouraged by the launch of Internet gambling with partner Bwin. Party Digital Entertainment, and estimated that the partnership currently commands over 40 percent of the New Jersey online gambling market.
Chief operating officer Paul Chakmak said the online business is primarily coming from new customers, despite suggestions that Internet gambling might cannibalise Atlantic City's brick-and-mortar casinos. 85 percent of those engaging in online gaming through Borgata have not had rated play at Borgata in the last two years, he disclosed.
"New Jersey is an important first step, but it won't be the last," Boyd president and CEO Keith Smith said, adding that the company intends to pursue Internet gambling ventures in other states if the practice is approved.
The group is awaiting a decision on a massive tax appeal settlement being challenged by the city, company officials said Wednesday.
In October, a tax court ruled that Borgata Hotel Casino & Spa was owed $48 million in overpaid taxes after the property was assessed at more than double its value in 2009 and 2010. The city has since appealed that ruling.
The casino's earnings before interest, taxes, depreciation and amortization would have been $2.1 million higher in the fourth quarter and $8.4 million higher across 2013 were it not for Atlantic City property taxes, said Chakmak.