New Jersey Goes After Borgata for Understated Gross Revenue

As a result, the Borgata Casino has understated the taxable revenue amount, the regulator found out.

The New Jersey Division of Gaming Enforcement took issue with the reporting by the company between October 2023 and May 2024 and argued that the company earmarked at least $4.5 million in promotional credits but added that the money had not fallen in this categorization. This comes amid broader talks about changes in overall reporting in the market.

Borgata in Hot Water with New Jersey Regulators

Because promotional credits are subtracted from revenues, the property ended up paying less tax, by an estimated $365,161 in a tax filing on June 2024. The property has not disputed the ruling and said that it would acquiesce to a fine – set at $75,000 by the regulator.

The breach concerns the BetMGM iGaming operations, the regulator said in a statement to Borgata SVP and legal counsel Patrick Madamba and is not the first time that the company had been reprimanded over the way it reports promotional credits.

A similar incident occurred in March 2023, when the company is said to have underpaid $787,000. The organization may have been failing to keep track of the huge volume of promotional credits.

However, Mary Jo Flaherty, the Interim Director of the New Jersey watchdog serving in the stead of David Rebuck who retired, has raised concerns about the way this revenue is tracked. She said that the understatement was serious, and it already constituted a second violation by the company.

Small Fines, Big Implications for the Business

Flaherty said that Borgata Casino was now due to pay $1.3 million in missed tax and penalties associated with this.

“The fact that this conduct was repeated less than 18 months after the Division warned an additional violation of this type could result in a civil penalty is also to be considered,” the executive added, lambasting the property further.

The regulator has refrained from further comments and has mostly kept the fines in line with what it has meted out before in similar cases. DraftKings was recently hit by the regulator with a $100,000 fine for inaccurate sports wagering numbers.

Flaherty was even less restrained in her dressing down of the company in a public rebuke and said that the type of behavior that DraftKings had demonstrated was not to be tolerated in New Jersey.