Atlantic City casino profits drop 7%, all nine casinos remain profitable
Nine Atlantic City casinos were profitable in the third quarter of 2023, according to data released Tuesday by the New Jersey Division of Gaming Enforcement (DGE).
New Jersey casino licensees reported net revenue of about $949.26 million from July to September, about the same as the same quarter in 2022. However, as operating costs continued to rise, its gross profit fell by nearly 7% to US$274.45 million.
DGE explained that total operating profit reflects earnings before interest, taxes, depreciation, amortization, ancillary costs and other miscellaneous expenses as reported on each casino's income statement. This benchmark is widely accepted as profitability in the Atlantic City gaming industry.
All nine casinos remained profitable for the second consecutive quarter despite profits down about $20 million.
Borgata returns to the top
MGM Resorts' Borgata was the city's most profitable casino in the third quarter, with total operating income of $73.5 million. Hard Rock was second with $44.3 million, and Ocean was third with $43 million.
Tropicana was next with profits of about $36.8 million, followed by Harrah's with $30 million, Caesars with $21.1 million, Golden Nugget with $11 million, Resorts with $8 million and Bally's with $7.3 million.
Caesars Entertainment reports its iGaming revenue separately, so earnings at the company's three Atlantic City casinos (Caesars, Tropicana and Harrah's) were slightly higher than reported. Caesars Digital unit reported gross profit of $5.1 million in the quarter.
Borgata temporarily lost its spot as Atlantic City's most profitable casino in the second quarter as both the Hard Rock and Ocean Casino outperformed MGM. Borgata returned for the third round with net sales of more than $218.3 million.
The hotel also revised its first- and second-quarter reports to reclassify its lease with Vici Properties, which owns the physical resorts and leases its operations to MGM, from operating expenses to non-operating expenses. That means profits could be much higher than initially expected.
Atlantic City casinos reported year-to-date profits of $632.1 million, 4.2% below industry levels a year ago. The Borgata was the top casino, with profits of $178.1 million from January to September.
Profit since the beginning of 2023 (in millions)
- Borgata – $178.1
- Hard Rock – $97
- Ocean – $90.6
- Tropicana – $78.50
- Harrah’s – $67.3
- Caesar – $47.80
- Gold Nugget – $23.60
- Resort – $21.1
- Bally – $9.20
AC Casino Beat 2019
Nine Atlantic casinos outperformed themselves compared to the pre-pandemic third quarter of 2019. Profit for the third quarter of 2019 was approximately $239.4 million on net sales of $928.9 million.
However, visitor numbers have declined. Atlantic City casinos reported 1.258 million room nights in the third quarter of 2019, but only 1.208 million in the same quarter this year. Casino prices are much higher, as the average room price in the third quarter of 2023 was $218, compared to just $161 four years ago.
Atlantic City's third-quarter net sales and total operating profit exceeded pre-pandemic levels. Third quarter net sales were the second highest in five years and third quarter gross operating profits were the third highest since 2008,” said James Plousis, chairman of the New Jersey Casino Control Commission.
Atlantic City casinos had a total of 15,520 resort hotel rooms available at the end of the quarter. They are rented almost 86% of the time.
Room booking results were strong in the third quarter, with year-to-date occupancy at 75% and an average nightly rate of $186.
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Source: www.casino.org
