Ultimate Gaming Takes Its Name from the Fertitta Brothers’ MMA Organization, the Ultimate Fighting Champions
The Fertitta Brothers appear to have given up on the idea of making money through online gambling. Station Casinos has shut down its online operations in Nevada, Ultimate Gaming and Ultimate Poker, just as the company left the New Jersey market last month.
At the time of the New Jersey pullout, the company said that it was leaving its partnership with Trump Taj Mahal, because that company had stopped paying it. Now the company says that the numbers have fallen far short of projections and the state-by-state approach makes the cost too high for many competitors.
iPoker Revenues Far Short of Expectations
Tom Breitling, chairman of Ultimate Gaming, told Forbes.com, “Online poker revenues in Nevada have fallen far short of original projections. Moreover, the state-by-state approach to online gaming has created an extremely cost-prohibitive and challenging operating environment.”
When it launched in April 2014, Ultimate Poker was the first licensed online gambling site in the United States since the Department of Justice had approved such gaming. Projections were far away from revenues, though.
$7.4 Billion in Projected Numbers
Analysts had suggested that the online gambling industry might make as much as $7.4 billion in U.S. revenues by 2017. That would require multiple big states to get involved. New Jersey has seen $103 million in revenues in 11 months of operation, while Nevada and Delaware were far behind those numbers.
As credit card payments continue to be a problem, the chances of many states getting on board the system become remote. Pennsylvania or California (or both) legalizing online betting might jump-start the industry, but banks would need to treat the iGaming sites as legitimate businesses before the industry would see the full impact of regulated online gaming.
Nevada Online Gambling Industry
The Nevada online gambling industry has been far less lucrative than iGaming advocates might have hoped. Despite have over 180 different brick-and-mortar casinos in Nevada, only 3 online gaming sites–less than 2% of the casino operators in the state. Nevada gaming companies are simply less enthusiastic about the Internet’s potential than their New Jersey counterparts.
One reason for their ambivalence is the relative good times most gaming operations in the desert state are experiencing. Atlantic City casinos need the additional revenues, while their Las Vegas counterparts are likely to see such business as small rewards. Land-based gaming entities have tended to view the onset of computer gambling with a mixture of disdain and dismay, as a potential rival to their business model. The Station Casinos were an exception, though, because Ultimate Gaming launched in New Jersey.
A second reason most gaming companies did not get involved from the start is the lack of licensed online casinos. With only Internet poker sites available for operators–and the small player pool to draw from (Nevada residents)–most casino operators saw little reason to dabble in iPoker. Even the signing of a gaming compact with Delaware did little to stoke interest.
About Station Casinos
Station Casinos, which operates Ultimate Gaming, is owned by Frank Fertitta III. The company was bought for $870 million in a leveraged byeout by Frank Fertitta III, Lorenzo Fertitta, Delise Sartini, Blake L. Sartini, and Colony Capital LLC. Colony Capital purchased 75% of the shares, while Fertitta Colony Partners owns 25% stake in the company.
Station Casinos was founded by the late Frank Fertitta Jr. in 1976. Frank Fertitta Jr. was the father of Frank Fertitta III, Lorenzo Fertitta, and Delise Sartini. Together, the Fertitta Brothers bought the Ultimate Fighting Championship in 2001. The association with the UFC is also why Station Casinos’ online presence is named ultimategaming.com. The Fertitta Brothers’ high school friend was Dana White, which is why White is the president and spokesman for the UFC.
Station Casinos is one of the dominant companies in the Locals casino market in Nevada. While companies like MGM Resorts, Caesars Entertainment, Wynn Resorts, and Las Vegas Sands Corp control the Las Vegas Strip, Station Casinos owns properties in Downtown Las Vegas and other Off-the-Strip locations. Companies like Boyd Gaming, Cannery Casino Resorts, Herbst Gaming, and American Casino & Entertainment Properties are similar in their designs and acquisitions.
