Borgata Hit With $75,000 Punishment By NJ Regulators For Overstating Promo Credits

The message to Borgata — Atlantic City’s top-grossing casino almost from the day it opened in the Marina District two decades ago — from New Jersey Division of Gaming Enforcement regulators was perfectly clear.

After the agency found in March 2023 that Borgata had overstated internet gaming promotional credits on its BetMGM platform by a whopping $9.8 million, and Borgata had to fork over $787,000 in additional tax payments in addition to $88,000 in interest and another $39,000 penalty, Borgata received this warning:

“This letter is also intended to serve as a reminder to Borgata and BetMGM of the requirements related to Internet gaming PGCs and the need for Division approval before any deductions are taken. In this instance, the Division has decided not to impose any financial penalty for this regulatory violation, and thus, only the gross revenue tax, penalty and interest are due and payable in accordance with the above. Should there be future violations of the regulatory requirements associated with Internet gaming PGCs, the Division may take additional action, including monetary penalties.”

Now, in a letter to a Borgata executive dated Aug. 15, interim DGE Director Mary Jo Flaherty backed up the warning with action.

This summer, the DGE found through an audit of Borgata’s financial filings that gaming credits again were overstated — this time to the tune of $4.6 million. The result was that an additional $365,000 in tax was owed, along with interest of $15,000 and a tax penalty of $18,000.

This time, there’s a fine

“The Division views this matter as serious,” Flaherty wrote in the recent letter. “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. 

“The Division notes that the underpayment of taxes was remedied quickly in each case, and software fixes were deployed to correct the reporting errors with regard to PGCs. Accordingly, the Division accepts Borgata’s offer to pay a civil penalty in the amount of $75,000 to settle the overstatement of PGCs.”