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.
Alex Igelman