US online poker starts to make profit

Caesars began generating online poker revenue during the third quarter of the year in Nevada and the fourth quarter in New Jersey. The company’s third-quarter earnings included only 11 days of online poker revenue. Caesars unveiled its World Series of Poker site Sept. 19. The company didn’t specify online poker revenue in its earnings report.

Station got an even earlier start, having already managed more than 1 million hands here, and is ready to roll out its product in New Jersey. Both companies take a percentage of gamblers’ money for every hand played.

Overall, Caesars reported revenue of us$2 billion, down 0.7 percent from the third quarter last year. The company reported us$112 million in casino revenue, a 7 percent decline offset by lower promotional expenses and increases in nongaming revenue.

Caesars is teaming with 888 Holdings and Amaya Gaming Group for online poker offerings on the East Coast. But the company also is reeling from losses it assumed when it withdrew its bid to build one of Massachusetts’ first casinos.
Online poker also could be profitable for the Boyd Gaming Corp. and MGM Resorts International, co-owners of Atlantic City’s Borgata, who are teaming up with Internet gaming provider bwin.party.


During the third quarter, Boyd saw its losses widen to us$37 million despite a 20 percent increase in revenue. Executives were happy with the results at Borgata but disappointed in spending by customers at Southern and Midwestern riverboat and racino properties.

MGM, meanwhile, is aggressively gearing up for online play in New Jersey. MGM’s losses narrowed in the third quarter due to a 9 percent increase in revenue.
MGM has the comfort of having a cash cow Macau property in its back pocket while waiting for New Jersey online revenue to roll in.

Wynn Resorts saw its earnings climb 63 percent to us$182 million, up 7 percent from a year ago, due to revenue generated in Macau. Las Vegas Sands also had a record quarter, with revenue up 32 percent to us$3.6 billion and earnings up 82 percent to us$809 million, thanks to earnings in Macau. But neither Sheldon Adelson nor Steve Wynn has any interest in pursuing online gaming.

Wynn says he’s satisfied sitting on the sidelines as others pursue cyber opportunities. He is focused on a casino bid in Massachusetts after backing out of plans to build in Pennsylvania.Adelson, on the other hand, has actively battled for a nationwide Internet poker ban, to the chagrin of most of his colleagues.

Another bellwether of the success of Internet poker will be Station Casinos. Station was the first company to offer online poker in Nevada, and its Ultimate Gaming is teaming with Trump Taj Mahal for Internet gambling in New Jersey.

Station posted a loss of $4.7 million during the third quarter, although revenue was up 3 percent to $305 million. The company focused much of its attention recently on opening a tribal casino it is managing near San Francisco.

American Casino & Entertainment Properties, operators of the Stratosphere and two Arizona Charlie’s properties in Las Vegas, hasn’t launched a real-money online poker play but is marketing a free product in advance of a pay site.

ACEP had a rocky third quarter due to increasing losses, a bid to refinance, reduced player volume and lower casino hold percentages. Revenue was down 1.6 percent to us$84 million and losses soared 185 percent to more than us$9 million.