Tom Ballance: Borgata Not Threatened by iGaming

Data is proving that online gamblers do not detract business away from brick and mortar casinos.

In a recent spot on CNBC’s “Squawk Box,” the Borgata’s COO Tom Ballance dismissed concerns that the casinos brick and mortar locale would suffer at the hands of its online gambling options.

Although his claims are only based on one month’s worth of data, statistics clearly exhibit that the majority of Borgata’s online users have not visited the casino in over a year, with the vast majority making less than two trips in the past twelve months.

Ballance went onto state that the demographics of live casino patrons differ widely from online players. Online players are generally younger males, while older individuals and women make up a more significant portion of the Borgata’s B&M clientele. In short, online players are a different customer.

He then went onto talk about how online gaming allows for significantly more control than a live gambling facility. Live casinos give lines of credit, while online patrons must deposit funds using their own checking account or credit card. Furthermore, before an online player is allowed to wager real-money their identity must be verified. Less verifications checks exist in live settings. As summed up by Ballance, “We know every bet you’re making online.”

The COO’s statements contradict the position held by anti-online gambling advocate Sheldon Adelson, who believes that online casinos allow players to run rampant.

Ballance also commented on the ratio of online poker-to-casino players, stating that the casino’s poker site generates more volume than the casino, but that a significant amount of poker players cross over and play casino during their session.

However, Ballance also conceded that online poker margins are lower than casinos. Yet, this comes as little surprise as the Borgata’s brick and mortar facility is a poker-first, table games and slots second casino. He emphasized the success of an online poker site is in large part dependent on concurrent players – something that matters less in an online casino environment.

Of note, Ballance indicates that 20,000 of the 150,000 online gaming accounts created in New Jersey were for Borgata owned sites. He also implies that part of the reason Atlantic City has fallen on hard times is that You have to provide a product and service that’s worth driving 90 minutes for instead of 15 minutes. Over the past few years, an outcropping of B&M casinos have opened in Pennsylvania and New York, many of which are closer to New Jersey’s most highly populated areas.

That said, the Borgata’s revenue was up in 2013 over 2012 – only the second time this has occurred in the past seven years.

To listen to excerpts from Ballance’s interview, it can be found on CNBC.