Atlantic City casinos still profitable, but their bottom line is getting leaner
Aug 22, 2023, 1:06 PM
(AP Photo/Wayne Parry)
ATLANTIC CITY, N.J. (AP) — All nine Atlantic City casinos turned a profit in the second quarter of this year, although that collective profit was down more than 20% from a year ago.
Only three casinos and one online entity recorded a larger profit in April, May and June of this year than they did in those same months in 2019, before the pandemic hit.
Figures released Tuesday by the New Jersey Division of Gaming Enforcement show the casinos posted a gross operating profit of nearly $146 million in the second quarter of this year. That is down 20.5% from the same period a year ago, and also less than the $159 million operating profit they posted in the second quarter of 2019.
Gross operating profit represents earnings before interest, taxes, depreciation, and other expenses, and is a widely-accepted measure of profitability in the Atlantic City casino industry.
Its decline in the second quarter is due to several factors, including a new contract reached last summer that pays many casino workers considerably more, said Jane Bokunewicz, director of the Lloyd Levenson Institute at Stockton University, which studies the Atlantic City gambling industry.
“Given the increases in labor expenses that did not exist prior to July 2022 and increases in operational expenses overall, this decline is not unexpected,” she said.
The fact that all nine casinos were profitable despite higher costs is encouraging, said James Plousis, chairman of the New Jersey Casino Control Commission. The casinos currently employ about 1,000 more people than they did a year ago, he said.
Hard Rock posted the largest operating profit at $30.4 million, but it was still down 20% from a year earlier. Tropicana had a profit of nearly $25 million, down nearly 18%, and the Ocean casino had a profit of nearly $24 million — up nearly 54% from a year earlier.
Those three casinos were the only ones to earn more in the second quarter this year than they did in the same pre-pandemic period of 2019.
Harrah’s had an operating profit of just over $18 million, down 15.5% from a year ago; Caesars had an operating profit of $15.3 million, up 8.3%; and Borgata’s profit was $12.3 million, down nearly 71%.
Golden Nugget had a $7.6 million profit, down nearly 16%, although it discontinued reporting its internet gambling results separately during the second quarter of last year, making a true comparison difficult.
Resorts had a $3.4 million profit, down over 44% from a year ago, and Resorts Digital, its online arm, had a profit of $1.1 million, down 35%.
Bally’s had a $1.8 million profit, up from a $3.7 million loss in the same period last year.
Caesars Interactive Entertainment NJ had a $6.7 million profit, up nearly 14% from a year ago and also up from the $5 million pre-pandemic profit it reported in the second quarter of 2019.
The casinos’ hotel occupancy rate in the second quarter was over 74%. Hard Rock had the highest occupancy rate at over 90%, while Bally’s had the lowest at just over 65%.
The Ocean Casino had the highest average nightly room rate at $263.15, while Golden Nugget had the lowest at $124.11.
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