Borgata Casino has reached a $75,000 settlement with the New Jersey Division of Gaming Enforcement following its second revenue overstatement within the past 18 months, resulting in more than $1 million in underpaid taxes.
In an Aug. 15 letter addressed to Borgata’s legal council, the NJDGE said the MGM property overreported $4.5 million in promotional BetMGM iGaming credits, resulting in a $365,161 underpayment in New Jersey taxes earlier this year. Under New Jersey law, operators can deduct these credits and other free play from their taxable revenue.
This incident follows a March 2023 audit where Borgata overstated similar credits by $9.8 million, leading to a $787,000 tax shortfall. While the earlier violation did not incur a fine, Borgata received a warning that future infractions could lead to monetary penalties.
Repeated violations cited
In the letter, NJDGE Interim Director Mary Jo Flaherty emphasized the seriousness of repeated violations.
“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,” Flaherty said.
“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.”
Borgata blames software switch
The March 2023 audit revealed that Borgata erroneously included table game bonuses in its calculation of iGaming promotional credits.
The casino attributed the error to a software upgrade implemented by BetMGM, which inadvertently caused the system to deduct more credits. By July 2024, the issue reoccurred because of similar software-related problems. As a result, Borgata overstated the amount of promotional credits again.
The NJDGE accepted Borgata’s offer to pay a $75,000 civil penalty, covering interest and tax penalties. Flaherty noted that Borgata has since deployed software fixes aimed at preventing such reporting errors in the future.
