Trefis – Wynn Resorts (NASDAQ:WYNN) recently applied for an online gambling license in the state of New Jersey, which legalized online gambling in February this year. ^[1] Online gambling accounts for only 3.3% of overall gambling profits in the U.S. and can offer tremendous growth for the operators in the coming years.

In the recent quarterly earnings, the company saw muted growth in Macau while its domestic operations surged 16%, including some signs of recovery on the Las Vegas Strip. (Read – Wynn Q2 2013 Numbers Disappoint As Growth In Macau Stalls) While we continue to believe in the Macau growth story, online gambling can boost Wynn’s overall revenues. An economic recovery and higher consumer spending will also aid overall gambling growth in the U.S.

New Jersey legalized online gambling and the regulators plan to go live with the legal intrastate betting sites by the end of this year. Apart from New Jersey, Delaware has fully regulated online gambling while Nevada had legalized online poker since the end of last year. Unlike Nevada, New Jersey and Delaware legalized most of the Internet casino games. While Delaware intends to only allow residents in the state’s jurisdiction to bet on the online sites, New Jersey wants to authorize intrastate betting with other states that legalized online gambling.  The New Jersey law requires online casino operators to partner with an Atlantic City casino, and share revenues generated online with the brick and mortar establishments. ^[1] Interestingly, Wynn had built the Boardwalk’s southernmost hotel-casino, which opened as the Golden Nugget Atlantic City in 1980, and was sold for $440 million in 1987. Since then, the property has had six different ownership groups and six different names. Given the state requirement of a local partner, Wynn may try to negotiate with the Atlantic Club and diversify out of the Las Vegas Strip.

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