New Jersey Gaming Regulator Fines Borgata Over Promotional Credits

Article by : Erik Gibbs Aug 21, 2024

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The Borgata Casino in New Jersey has been fined by the state’s Division of Gaming Enforcement (DGE) for inflating its promotional gaming credits by more than $4.5 million between October 2023 and May 2024. This overstatement led to a significant underpayment in gross revenue taxes, totaling $365,161 on the casino’s June 2024 tax filing. The casino, which operates in partnership with BetMGM for both iGaming and sports betting, has agreed to pay a $75,000 fine as a result of the violation.

The DGE’s findings were communicated in a letter to Borgata’s SVP and Legal Counsel, Patrick Madamba. According to the DGE’s interim director, Mary Jo Flaherty, the error was identified in the reports submitted by Borgata, which were linked to BetMGM’s iGaming platform. Despite the seriousness of the issue, BetMGM has not provided any comment about it.

This incident marks the second time in less than 18 months that Borgata has been penalized for similar discrepancies in its reporting of promotional credits. In March 2023, the casino was found to have overstated its iGaming promo credits by nearly $10 million, resulting in an underpayment of more than $787,000 in taxes. Flaherty emphasized that the DGE views these repeated violations as a serious concern, noting that they resulted in additional taxes, penalties, and interest amounting to over $1.3 million.

While Borgata promptly corrected the underpayments on both occasions, the DGE highlighted that inflating promotional gaming credits beyond the actual bonuses issued is a clear breach of regulations. The DGE’s July 10, 2024 audit findings shared that further regulatory action could be considered due to the repeat nature of the violation.

The Borgata’s fine is part of a broader enforcement effort by the DGE, which has also taken action against other major operators in the Garden State. For instance, DraftKings was fined $100,000 last month for significant errors in reporting sports betting data. These mistakes led to incorrect tax filings for three months, from December 2023 to February 2024.

On the other hand, bet365 was ordered to pay over half a million dollars to New Jersey bettors after the DGE found that the sportsbook had been altering odds on events without proper notification to the regulators.

These incidents reflect the DGE’s ongoing efforts to ensure compliance and integrity within the state’s gaming industry. The fines and corrective actions in place are intended to support the standards of fairness and accuracy required by New Jersey’s gaming laws, particularly as the industry continues to grow and evolve in this state.