Wynn Resorts Delays Online Wagering Website Despite NJ Approval

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Friday, February 14th, 2014 | Written by Shane Larson

Despite Wynn Resorts Limited being granted approval to offer online gambling services within New Jersey’s state’s boundaries, the Las Vegas-based casino operator said it has no intentions to do so for now and would, instead, be taking a “wait and see” approach until it gains a clearer picture of the market.

Wynn taking a “wait and see” approach

In response to its early application, the New Jersey Division of Gaming Enforcement had given Wynn Resorts authority to partner with Caesars Interactive, as well as granting the companies’ request to use the All American Poker Network (AAPN) and 888 Atlantic Limited as their online gambling services provider. Soon after the transactional waiver was given the green-light, Caesars Interactive representative Seth Palansky, commented: “We are allowing them to use one of our permits. I’m not aware of if they are going live, or when.”

However, Wynn Spokesman Michael Weaver then quickly stepped into the frame and clarified his company’s position by stating that “Mr. Wynn said this weekend; online gaming does not appear to be a good entrepreneurial opportunity. Consequently, our plans are on hold until we understand the business opportunity.”

Slow start to New Jersey internet gambling

New Jersey‘s latest internet gambling figures may, indeed, lend credence to Wynn Resorts concerns as although January’s revenue results of $9.5 million was a 28% improvement over the $7.4 million generated in December, those figures are still significantly lower than Gov. Chris Christie’s initial forecast of $1 billion in revenues for the whole of the first year.

Giving an early indication to the state of the New Jersey internet wagering market, the Borgata Hotel Casino and Caesars Interactive continue to dominate the industry with a combined 73% of total online revenues, while the other four operators languish a long way behind. Overall in January, the Borgata Hotel Casino hauled in $3.9 million in revenues, equivalent to 40% of the market, followed by Caesars Interactive with around $3 million in revenues. On the other hand, Trump Taj Mahal’s Ultimate Casino brand generated just$858,351, the Tropicana Casino and Resort $841,065, Trump Plaza Hotel $557,007, and the Golden Nugget Atlantic City $286,922 in revenues last month.

Furthermore, a recent poll focusing on regulated US markets indicates that New Jersey may soon reach the same saturation point already experienced by the other legalized internet gaming states of Nevada and Delaware. Commenting on the present condition of NJ internet gaming, Steve Wynn, said:

“This is not a good entrepreneurial opportunity. What is the business opportunity?”

Wynn may now be in league with Sheldon Adelson

In addition to his concerns over the viability of online gambling in New Jersey, Steve Wynn now seems to have adopted many of the anti-online gambling arguments proposed by Las Vegas Sands CEO Sheldon Adelson, especially those concerning underage gambling. Up until recently, Adelson had found himself isolated within the industry as his moral concerns about internet gambling sparking a tsunami of gambling addiction Stateside was seen as a stretch too far for a casino tycoon. Having Wynn on board, however, adds extra credence to Adelson’s stance, whilst also making his anti-internet gambling crusade seem like it now enjoys a broader appeal.

Nevertheless, Wynn’s position on the topic has changed several times over time and three years ago he changed from being suspicions about online gaming to becoming one of its enthusiastic supporters. In January, Wynn subsequently stated that he was “neither an opponent nor a proponent” of online gaming, until his most recent change of heart this month.

Some analysts, on the other hand, believe Steve Wynn’s “wait and see” approach may be linked to the fact that when he enters a new market, high on his list of priorities is to dominate it, as he showed in both Las Vegas and Macau. Yet another reason for his stance may be that he is simply holding back as he cannot see potential rewards outweighing risks at this stage of the game, or that he cannot see internet gambling legislation ever getting through Congress.

“[Legalizing online gambling] can’t get through the House of Representatives. They can’t agree on anything, especially something this esoteric,” explained the 72 year-old casino magnate.

Whatever the case may be, for now Wynn Resorts’ decision to stay out of New Jersey online gambling will come as welcome news to the state’s other operators who would rather not see such a formidable company enter an already highly competitive market.