Borgata Fined $75K For Overstatement of Promotional iGaming Credits
Table Of Contents
The New Jersey Division of Gaming Enforcement has fined Borgata Casino for an overstatement of iGaming promotional gaming credits, which led to an underpayment of gross revenue iGaming taxes.
It was the second such offense from the Borgata Casino in the last 18 months in New Jersey.
The casino agreed to pay a $75,000 fine.
Underpayment of $365K in Taxes
New Jersey Division of Gaming Enforcement (NJ DGE) Interim Director Mary Jo Flaherty notified Borgata Senior Vice President and Legal Counsel Patrick Madamba, Esq., of the fine through a written letter.
Flaherty wrote that the NJ DGE identified the error in reports submitted by Borgata related to the BetMGM iGaming platform from Oct. 2023 through May 2024. According to the division, Borgata Casino overstated iGaming promotional gaming credits by $4,564,515, which resulted in an underpayment of gross revenue tax of $365,161 through the June 2024 tax filing.
The incident is the second underpayment of gross revenue tax by Borgata in less than 18 months. The first was on March 27, 2023, where the Borgata was found to have overstated iGaming promotional gaming credits by $9.84 million, resulting in an underpayment of over $787,000.
BetMGM is an iGaming and sports betting partner of the Borgata.
“The Division views this matter as serious. 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 wrote in the letter.
New Software Led to Underpayment
The March 2023 finding was based on improper inclusion of certain table games bonuses in the calculation of iGaming promotional gaming credits. BetMGM reported that a software upgrade had the consequence of deducting gaming credits in an amount greater than the actual amount of bonuses awarded.
“Accordingly, claiming PGCs in excess of the amount of the bonus issued is a clear violation of the statute. Moreover, in the Division’s July 10, 2024 audit findings and assessment correspondence, it set forth that it may take additional regulatory action in this matter, including monetary penalties, in that this was the second violation in this PGC area that resulted in a significant gross revenue tax, tax penalty and interest assessment,” Flaherty wrote.
The NJ DGE accepted Borgata’s offer to pay the civil penalty of $75,000.
“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 promotional gaming credits.”
Robert Linnehan
Covering regulatory developments in online gambling. Editing/writing/creating a newsletter for readers across all formats.
