It has taken Fitch Ratings three attempts to confirm what I have been saying for more than 6 months now. I predicted that the total revenue from Internet gambling in NJ will not exceed 150 Million dollars for the full year. Fitch now pegs full year revenue at between 120M-130M.
A recent decision by the Federal District Court could put a chill into the numerous US poker and casino players who have in the past or continue to play with offshore companies.
In it, the government claimed that FirePay, PokerStars, and PartyPoker are all financial institutions because they function as “commercial bank[s].”
Because the taxpayer in question did not disclose these accounts and because they were foreign accounts reportable on a Report of Foreign Bank and Financial Accounts (FBAR) under 31 U.S.C. 5314 and subject to penalties under. 5321, the taxpayer was liable to pay significant penalties and interest.
What scrutiny this will now open up for Pokerstars and others is yet to be seen.
In light of the recently announced acquisition of Pokerstars by Amaya and in light of the fact that the new owners are looking to enter regulated markets (NJ, etc…) it will be interesting to see what further scrutiny will come to bear by the IRS and other government institutions on Pokerstars as they attempt to enter the US market as operators.
Will the US government ask operators like Pokerstars to disclose the name of all US poker players that have held accounts over $10,000 with them over the past years? What about the poker players themselves, should they visit their accountants and lawyers soon?
It is one thing when Pokerstars was a private company and beyond the reach of US authorities. It is another thing when the new owners are public companies seeking US regulation by State governments.
Let’s see how this develops….
Click on the full article below:
In this informative article by Nathan Vardi of Forbes, readers are walked through the reasons Adelson is winning the battle against the proliferation of online gambling in the US.
I have repeatedly said that due to the limited market in NJ and the many issues the NJ operators face (geo-location errors, credit cards rejections, etc…) the NJ online experiment is bound to fail in its present form.
When you add to this the very low likelihood for the passage of a federal bill that would allow for multi-state liquidity, you have a recipe for failure.
Notwithstanding all of this, NJ could be successful if the operators would focus on mobile and tablet gaming instead of PC based gaming and the software providers would develop unique games that people could wager on that were not the typical slot and casino games they currently offer.
Poker is practically a dead horse and the operators should consider pooling liquidity and using one software provider for the entire State with all the operators sharing in operational costs and proportional revenue (based on delivering players).
Faced with all these issues, it is time for some out-of-the-box thinking in NJ if they want to survive and set a good example for the online gambling proponents.
If King can generate north of a million dollars a day with one game (Candy Crush), there is no reason why NJ operators cannot begin to offer unique and fun games for people to play and wager thereby capitalizing on the opportunity they have been given by the state of NJ.
Read the full Forbes article below.
Finally we are getting to see the real numbers that the online gambling industry in NJ is generating. That is, we are now getting a peek inside the operations and are seeing the true operating costs of running this type of business and it does not look pretty. The operators are clearly losing money as I predicted months ago.
Prior to this recent revelation, we were only being shown the revenue figures but now Borgata and 888 are admitting that the business is not profitable. Even these figures may be deceiving as some of the sponsorship deals ( Party-Borgata and the Devils/76ers and Caesars and the NY Rangers) may be hidden in the financial statements as something other than direct marketing expenses. These deals cost the casinos millions of dollars and the payback may never come.
As I have said before, the NJ experiment is bound to fail because there is limited demand/liquidity and a Federal bill allowing online poker/gambling and thus multi-state liquidity will not be coming anytime soon.
Online gambling execs taking a second look at how they market in NJ | NJ.com.
It was only a matter of time before the American Gaming Association withdrew its support for online gambling in the US.
Many observers have stated that Adelson and the Coalition to Stop Internet Gambling could not stop the proliferation of online gambling outside of New Jersey, Nevada, and Delaware. I beg to differ.
The AGA’s withdrawal of support is a big blow to the pro-online gambling forces. Couple this with dismal revenue figures coming out of NJ, NV and DE and the growing support from lawmakers and others for a ban, the future does not look bright for the pro-online gambling forces.
Never count Mr. Adelson out. People have tried before and they have failed. Looks like he is back and getting stronger by the day.
To read the article, click on the link below.
Online Gambling Suffers Setback – WSJ.com.