The New Jersey Division of Gaming Enforcement (NJDGE) has imposed a $75,000 fine on Borgata Casino for underpaying its taxes. This marks the second time in the past 18 months that the MGM-run casino has been penalized for such an issue.
Between Oct. 2023 and May 2024, Borgata overstated its online casino promotional credits by over $4.5 million, leading to a tax underpayment of $365,161.
In March 2023, Borgata was similarly found to have overstated its iGaming promotional credits by almost $10 million and underpaid by more than $787,000.
Not the first time
Mary Jo Flaherty, the NJDGE’s Interim Director, addressed the error in a letter to Patrick Madamba, Borgata’s SVP and Legal Counsel.
“The Division views this matter as serious,” Flaherty stated. “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.”
Borgata has agreed to pay the fine.
Despite the repeated issue, Flaherty noted Borgata resolved the underpayment promptly both times. Still, she emphasized the issue as a “clear violation” of legislation.
“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 added.
Borgata blames a software glitch for the recurring tax underpayment issues. According to the casino, a March 2023 audit revealed that a software error by BetMGM led to the incorrect inclusion of table game bonuses in iGaming promotional credits.
Other operators fined
Earlier this month, it was revealed that the NJDGE fined bet365 for voiding 199 bets worth $519,323 without regulatory approval. The sportsbook voided wagers on 13 events from Dec. 2020 to Nov. 2022, citing odds errors.
In July, the regulator fined DraftKings $100,000 for overreporting the amount wagered on multi-leg parlays and understating other categories. DraftKings claimed not to realize that the inaccurate data would affect gross revenue and tax reports.
“These types of gross errors and failures cannot be tolerated in the New Jersey gaming regulatory system,” wrote Flaherty in a letter to DraftKings on June 16.
NJ online casinos
New Jersey was one of the first states to legalize online casinos in 2013 after the NJ Assembly voted to pass A2578. The state is now home to around 30 online casinos, each of which must partner with a land-based casino in Atlantic City. Borgata is partnered with Borgata Hotel Casino and Spa, which is owned by Vici Properties and operated by MGM Resorts International.
Earlier this month, the NJDGE reported its latest revenue figures for July, covering sports betting, in-person casinos, and iGaming. The report noted a 25.9% increase in iGaming revenue year-on-year at $195.4 million, taking year-to-date iGaming revenue to $1.3 billion.
