The New Jersey Division of Gaming Enforcement has fined Borgata Casino for overstating its iGaming promotional gaming credits by more than $4.5 million between October 2023 and May 2024.
The DGE noted that the incorrect reporting, which overstated iGaming promo credits by $4,564,515, led to a $365,161 underpayment of gross revenue taxes on Borgata’s June 2024 tax filing.
Borgata, which is an iGaming and sports betting partner of BetMGM, has agreed to pay a $75,000 fine.
In a letter to Borgata SVP and Legal Counsel Patrick Madamba, NJ DGE Interim Director Mary Jo Flaherty wrote that the NJ DGE identified the error in BetMGM iGaming platform reports submitted by Borgata between October 2023 and May 2024.
BetMGM did not offer a comment when SBC Americas reached out.
Borgata’s second promo credits violation in NJ in 18 months
Flaherty also noted that this is the second underpayment of tax by Borgata in New Jersey in less than 18 months. The casino operator was found in March 2023 to have overstated its iGaming promo credits by nearly $10 million, resulting in an underpayment of over $787,000.
“The Division views this matter as serious,” wrote Flaherty. “The original violation was an understatement of gross revenue by almost $10 million. This second understatement of gross revenue was in an amount of over $4.5 million. These understatements resulted in the assessment of additional taxes, tax penalties and interest of over $1.3 million.
“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 noted that the underpayments were quickly corrected in both cases. However, she stressed that claiming promotional gaming credits in excess of the amount of the bonus issued is “a clear violation” of the statute. The division’s July 10, 2024 audit findings and assessment correspondence stipulated that the DGE may take additional regulatory action in light of the fact this was a repeat violation.
NJ sanctions other operators
Borgata and BetMGM aren’t the only major operators to be hit with a fine by the NJ DGE in recent months.
In July, the Division fined DraftKings $100,000 for “gross errors and failures” in reporting inaccurate sports betting data, wherein DraftKings overstated the amount of money that had been wagered on parlay bets as well as understating other categories of wagers. The mistakes caused the online arm of DraftKings’ casino partner Resorts to file incorrect sports betting tax returns for three months from December 2023 to February 2024.
Then, earlier in August, it ordered bet365 to pay out more than half a million dollars to in-state bettors after finding the sportsbook had been changing odds offered on events over the span of two years without telling the DGE.
The DGE directed bet365 to pay $519,323.32 relating to 199 winning wagers that were placed by Garden State sports betting customers between December 2020 and November 2022 at their originally posted odds rather than the corrected odds. The DGE said the violations “evidence a prolonged and unacceptable course of conduct.”
