Borgata hit with penalty

Borgata Casino has agreed to pay a $75,000 fine by the New Jersey Division of Gaming Enforcement for overstating its Internet Gaming Promotional Gaming Credits (PGCs).

Borgata made a gross revenue tax underpayment of more than $365,000

The casino, through its BetMGM platform, was found to have overstated its PGCs by over $4.5m from October 2023 through to May 2024. As a result, Borgata made a gross revenue tax underpayment of more than $365,000 on the company’s last filing in June 2024.

The overstatement was supposedly due to a software upgrade by BetMGM which caused PGCs to be deducted in an amount greater than the bonuses actually awarded.

Borgata’s second strike

A letter from Mary Jo Flaherty, Interim Director of the New Jersey Division of Gaming Enforcement, mentioned that this was the second time that Borgata had underpaid tax in the past two years. In March 2023, Borgata made the same mistake, again overstating its PGCs by $9.8m, leading to a $787,000 underpayment.

the repetition of the mistake was cited as one of the reasons for the $75,000 civil penalty

In 2023, Borgata was not issued with a fine, but was warned in a response at the time that any further transgressions could result in financial penalties. Accordingly, the repetition of the mistake was cited as one of the reasons for the $75,000 civil penalty.

In the letter, Flaherty stated: “The Division views this matter as serious. The original violation was an understatement of gross revenue by almost $10m. This second understatement of gross revenue was in an amount of over $4.5m. These understatements resulted in the assessment of additional taxes, tax penalties and interest of over $1.3m.”

“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.”

Flaherty did, however, note that the error was rectified quickly on both occasions. However, with $100,000 being the maximum penalty per violation able to be issued, the fine is still at the higher end.

NJ regulator’s busy year

The New Jersey Division of Gaming Enforcement have been particularly active in recent months, with Borgata not the only operator to fall foul of regulations.

DraftKings received a maximum penalty of $100,000 in July for “unacceptable conduct” in misreporting the amount of money wagered on parlay bets, which the operator blamed on a coding error in a new database. In New Jersey, online operators are required to partner with a racetrack or casino, and DraftKings’ partner Resorts Casino ended up filing inaccurate tax returns over the period as a result.

had to pay more than $230,000 to settle the erroneous wagers

In the same month, DraftKings’ competitor FanDuel was also hit with a much smaller fine of $2,000 for taking bets on pre-recorded Mixed Martial Arts fights which were billed as live events. The operator also had to pay more than $230,000 to settle the erroneous wagers.

And most recently, in August, Bet365 was reprimanded and forced to pay out $519,323 to bettors after the operator voided wagers which it claimed were posted with incorrect odds.