SugarHouse Casino Drops Golden Nugget Over NBA Sports Betting Ban in New Jersey
Posted on: October 18, 2018, 05:00h.
Last updated on: October 18, 2018, 04:40h.
Pennsylvania’s SugarHouse casino is bailing on its New Jersey sports betting partner, the Golden Nugget, because the Nugget is forbidden from offering NBA betting under New Jersey gambling laws.
As an out-of-state company, SugarHouse parent Rush Street Gaming was required to team up with an Atlantic City land-based casino license-holder to enter the New Jersey online casino and sports betting market with its PlaySugarHouse.com brand.
But less than two months after launching online sports betting in the Garden State, Rush Street has apparently had enough of trading at a disadvantage, and now plans to hop into bed with the Meadowlands Racetrack instead, according to eGaming Review.
Using figures from Nevada as a model, NBA betting will account for around 15 percent of sports betting handle in the newly regulated US markets.
Rockets Block Sports Betting
The Nugget is prohibited from setting lines on the NBA because its owner, Tilman Fertitta, also happens to own the Houston Rockets.
New Jersey’s sports betting rules include an integrity provision that precludes owners of professional sports teams from sports betting licensing — although the state tailored its rules to ensure Caesars and MGM Resorts could enter the market.
MGM owns the WNBA’s Las Vegas Aces, but earns a carveout because the team generates less than one percent of the group’s total revenue.
Meanwhile, Philadelphia 76ers owner Joshua Harris is the founder of Apollo Global Management, which — along with TPG Capital Management — is the principal shareholder in Caesars Entertainment, via a jointly owned company called Hamlet Holdings.
But because Harris’ own personal equity in Caesars is less than 10 percent, he’s in the clear — although that would not have been the case prior to Caesars’ recent chapter 11 bankruptcy reorganization.
Proposed Caesars Deal Could Force Change
The Golden Nugget recently said it “hopes to persuade lawmakers over time that the total NBA ban is unnecessary and should be limited simply to the Houston Rockets team owned by Mr. Fertitta”.
But reports this week that Fertitta has approached Caesars with a reverse merger proposal creates a completely new dynamic. Sources who spoke to Bloomberg claim the proposed deal would install Fertitta as chairman, CEO, and principal shareholder of a combined company.
If the deal came to fruition, it would exclude Caesars from sports betting under current New Jersey laws, as well as the Golden Nugget, which might be enough to force state regulators to reconsider their position.
A combined Caesars Entertainment and Golden Nugget Casinos group would own a third of New Jersey’s casino market, and its existing sports betting laws would strangle a sector the state spent seven years and millions of dollars fighting to establish.
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