Ultimate Gaming, the nation’s first legal and regulated real money online wagering website, said Friday it was ending its Nevada-based operation, citing a lack of profitability from the 19-month-old business.
Station Casinos is the majority owner of Ultimate Gaming and has marketed the Ultimate Poker website through its Southern Nevada casinos.
Ultimate Gaming employees were told of the shutdown this morning.
In a statement, Ultimate Gaming Chairman Tom Breitling said online poker revenue in Nevada fell far short of once-lofty projections. Breitling said the current state-by-state approach to legalizing online gaming legalization “has created an extremely cost-prohibitive and challenging operating environment.”
Only three states — Nevada, New Jersey and Delaware — allow regulated online gambling. Online poker websites in Nevada can only accept wagers from players physically in the state.
“These factors have combined to make the path to profitability very difficult and uncertain,” Breitling said. “Consequently, we have decided to cease operations.”
The Ultimate Poker website will stop accepting wagers immediately and its shutdown will comply with various regulatory requirements, the company said.
Ultimate Gaming customers seeking information concerning their account can go online at www.ultimatepoker.com and click support.
Ultimate Poker, which also had a marketing agreement with Ultimate Fighting Championship, launched on April 30, 2013 and had a monopoly in Nevada until the Caesars Entertainment Corp. launched WSOP.com in September 2013. The site is tied to the World Series of Poker.
In September, Nevada’s three online poker sites — Ultimate, WSOP.com and Southpoint’s Real Gaming — reported combined gaming revenue of $693,000, the lowest single-month total since the state began releasing monthly online numbers this year. In June, the sites collected a combined $1.037 million in gaming revenue.
Station Casinos and Ultimate Gaming officials have informed regulators of the planned shutdown.
“We are working closely with the Gaming Control Board to ensure a smooth transition for our customers as we cease Nevada operations,” Breitling said.
In September, Ultimate Gaming severed its agreement to manage online gaming operations for the Trump Taj Mahal in Atlantic City. The casino filed for bankruptcy and a company owned by Station Casinos was listed as a creditor owed $1.5 million.
When the deal ended, Ultimate Gaming and Taj Mahal had the lowest gaming revenue total of New Jersey’s six online gaming websites through August, according to state gaming regulators.
Ultimate Gaming also had an agreement to allow the Peppermill Casino in Reno and its four affiliated Northern Nevada casinos to use the company’s Internet wagering platform. Those websites will also cease operations.
In Station Casinos’ third quarter, at least $10 million of the company’s net loss was attributed to the online gaming operations, much of it due to tax write downs.
“Needless to say, the online gaming market has been a considerable disappointment,” Station Casinos Chief Financial Officer Marc Falcone said during a conference call Wednesday.
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