Fizzle Or Sizzle? The Impact Of MGM On The New Jersey Online Gaming Market

MGM Lion and Las Vegas Strip
MGM has officially announced its partnership with GVC to power its playMGM online poker and casino sites. Now online gamblers in New Jersey won’t have long to wait before they get their first glimpse at the new sites.

There is no official launch date yet, but in addition to using the same platform provider as Borgata, playMGM will operate under Borgata’s online gaming license (MGM is the owner of the Borgata) and on the same online poker network.

That’s what we know. But there’s a lot we don’t know.

Here’s our best guess at MGM’s potential online gaming impact in New Jersey.

Can MGM grab significant market share?

With the exception of Betfair, non-Atlantic City casinos have lagged behind when it comes to online gaming market share in New Jersey. The dominance of the New Jersey casino brands is due to both awareness and trust, two things MGM has in spades.

New Jersey residents may not know MGM owns Borgata, but they’re aware of MGM as a company. This should translate into instant trust.

MGM is on a different level than the other non-AC companies operating online gaming sites in New Jersey. MGM isn’t a veritable unknown, as is the case with PartyPoker, 888, or Pala. Furthermore, MGM’s brand is light years ahead of the likes of SugarHouse or even Mohegan Sun, despite the strong regional brands they possess.

The overarching question is can MGM leverage its brand to grab a sizable share of the New Jersey online gaming market?

Several factors are working against MGM on this front:

  • The market is already quite mature;
  • MGM is very late to the online gaming party in New Jersey; and
  • MGM is competing against itself in the form of the Borgata online gaming sites (more on this in a moment).

Verdict: Possibly.

MGM is a well-known, national brand that should resonate with New Jersey players. Whether that turns into significant market share remains to be seen.

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Can MGM grow the overall online gaming market?

As referenced above, the MGM brand may be new to New Jersey. However, the database it will use to market to potential customers is the same one Borgata uses.

MGM hasn’t been withholding the names of potential New Jersey customers from Borgata, so it’s likely the database is exhausted.

Verdict: Unlikely.

The launch of playMGM isn’t a case of a new casino entering the market with a proprietary database of customers where the overlap with the existing casinos might be 80 percent. In the case of MGM, the overlap is 100 percent with at least one current operator.

Will MGM be good, bad, or ‘meh’ for Borgata?

MGM most likely won’t grow the total market, but what the launch of the MGM brand in New Jersey might bring about is the cannibalization of some of the other online operators, thereby increasing Borgata’s share of monthly online gaming revenue.

Borgata is in desperate need of this type of jolt. Golden Nugget rocketed past it during the past few months. Even more worrisome than losing the top spot, Borgata’s online revenue market share dipping to an all-time low of 20 percent in March. That represents a decline of around five percent over the previous 12 months.

MGM should provide an assist to Borgata with a marketing blitz to celebrate its launch, accompanied with the usual media buzz.

That being said, without an ongoing marketing plan or significant improvements to its platform – any players giving playMGM a look will quickly realize it’s the Borgata online casino in a new package — Borgata will only get a sugar high.

My expectation is the initial cannibalization will be short-lived. It will peter out after the big bonuses clear and the curious players who signed up to see what all the hubbub was about return to other sites.

Verdict: Good at first, but receding to neutral over time.

The addition of MGM  should lead to an almost immediate increase in market share for Borgata/MGM/Pala. But unless the marketing blitz is sustained, or its online gaming platform enhanced, the boost could be short-lived.

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Steve Ruddock

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Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus is the developing legal and legislative picture for regulated US online poker and gambling.