Midday Market Minute: A Prelude to Internet Gaming in New Jersey


By Hilary Russ

Feb 11 (Reuters) - Guests at one New Jersey casino will be the first in the United States to place bets with the click of their television remote controls, as gambling gets ever closer to going online in the state.

The Borgata Hotel Casino & Spa in Atlantic City will launch a field trial for in-room video poker and slots on Feb. 18, following approval from state gambling regulators in January for the project to begin.

The 90-day experiment - available on televisions in the majority of the Borgata's 2,800 hotel rooms - is likely to provide insights on how state lawmakers could legalize online gaming after New Jersey's Republican Governor Chris Christie narrowly vetoed a bill last week which would have done just that.


The technology "provides us a first look and first step at things that are greater to come, both with mobile technology and internet technology," said Joe Lupo, senior vice president of operations at Borgata, owned by Boyd Gaming Corp (BYD).

"We are fully confident that it will be successful and we can incorporate what we learned into both the mobile and internet regulatory processes," said Lupo.

Software developer Allin Interactive Corp, a subsidiary of Allin Corp (ALLN), has been providing in-room gaming to cruise ships in international waters for several years. But the company says the New Jersey experiment is the first land-based in-room gaming operation in the United States.

Up to eight U.S. states are considering legalizing online gambling to varying degrees, according to analysts at Citigroup.

Some forms are already legal in Delaware and Nevada. But large markets remain untapped. In New Jersey, the market could be worth up to $1 billion.

New Jersey lawmakers had passed a bill that would allow Atlantic City casinos to offer online gaming to the state's nearly 8.9 million residents, and create opportunities for European companies with expertise in running online gaming operations.

Christie vetoed the legislation but suggested he would support it in the future if it included funding to treat gambling addiction and a requirement that elected officials disclose relationships with internet gaming license holders.

He also said New Jersey's law, if passed, should be reviewed after 10 years to gauge its impact on problem gambling.

Betting from the Swimming Pool

Companies that stand to gain from the expansion of online gambling in the United States include Caesars Entertainment Corp's (CZR), Bally Technologies Inc (BYI), International Game Technology (IGT), WMS Industries Inc (WMS) and SHFL Entertainment (SHFL), among others.

UK-based bwin.party, the world's largest listed online gaming group, has a joint venture with Boyd Gaming.

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New Jersey lawmakers said on Monday that they would adopt the governor's changes to the Internet gambling legislation as quickly as possible, saying Internet gambling would provide a much-needed boost to struggling Atlantic City and would save jobs.

"Opening New Jersey gaming up to Internet wagering will provide untold benefits to the state and to the city, which has had to contend with increased out-of-state gaming competition in recent years," said State Senator Jim Whelan, a Democrat and one of the bill's sponsors.

The test program for television-based gaming comes after New Jersey passed a law in 2012 allowing gaming on mobile devices -including smart phones and iPads - as long as they remain inside the hotels, swimming pools, restaurants and other recreation areas of Atlantic City casinos.

Under the test program at Borgata, guests will be able to use the casino's existing interactive television platform to buy credits and play games on their hotel room televisions.

Borgata is also eyeing the possible expansion of games to mobile devices inside its property using a sort of electronic blocker called a "geo-fence," Lupo said.

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