Casino Earnings in Atlantic City Decrease by 20%, All Nine Establishments in the Positive
The Atlantic City casinos made a nice profit in Q2, but it wasn't as impressive as it was last year.
On the third day of July, the New Jersey Division of Gaming Enforcement (DGE) released the quarterly earnings report for the nine casinos in Atlantic City. Even though revenue increased by 0.9% to $795.7 million in April to June, the operating profit plunged 20% to $138 million.
According to the DGE, the net revenue includes casino revenue (after subtracting promotional deals) and money generated from hotel rooms and food sales. Gross operating income refers to earnings before interest, taxes, depreciation, amortization, and commissions. This is a commonly used measure of performance in Atlantic City's casino industry.
The casinos' profits were hampered by increasing costs. The resorts cited higher expenses for smaller earnings. The cost of most goods is still higher than it was just a few years ago due to the massive inflation we experienced in 2021 and 2022. In addition to that, labor costs have also spiked as the properties fight for workers.
Mixed Results for H1
The casinos have generated $1.57 billion in total revenue from their physical venues and online platforms for the first six months of the year. Although that's up 1.5% compared with the first half of 2022, overall earnings have taken a 18% hit.
The casinos have managed to attract more visitors, as they filled 15,518 guest rooms 70% of the time during the first two quarters. The occupancy rate stayed the same compared to the same period last year, but there are now 418 more rooms than in 2022.
These additional rooms came from Ocean, which opened 460 new accommodations and suites on floors that weren't finished when it opened as Revel in 2012.
Rising Room Rates
The average cost for a guestroom in a Atlantic City casino for the year so far has been $166, a minor increase from 2022. While gaming revenue has managed to hold its ground a little better, the physical casinos combined generated $1.35 billion in revenue from February through June, a healthy 3.5% gain over 2022.
Plousis, the chair of the New Jersey Casino Control Commission, said in a statement that "the competition between operators for guests drove up occupancy, revenue, and employment." All nine casinos were still in the black despite detailing higher expenses, including labor costs, he added.
Plousis noted that the current nine casinos employ about 1,000 more people than they did a year ago. He called this "great news for the workforce, the region, and the state."
Borgata Leads the Pack
MGM Resorts' Borgata Hotel & Casino has consistently outperformed other Atlantic City casinos in terms of revenue and prestige. This trend hasn't changed in 2023, as the Marina District property's net revenue of $376.9 million through the first six months placed it about $114 million ahead of Hard Rock in second place.
But Hard Rock's operations edged out Borgata's, as the Boardwalk casino recorded the best gross operating income through the first two quarters at nearly $52.7 million. Ocean took second place with $47.5 million.
Q1-Q2 2023 Profits
- Hard Rock — $52.67M
- Ocean — $47.57M
- Tropicana — $41.68M
- Harrah's — $37.3M
- Borgata — $35.14M
- Caesars — $26.7M
- Golden Nugget — $12.51M
- Resorts — $12.3M
- Bally's — $1.91M
*Caesars Entertainment separates its iGaming revenue in its reports. Therefore, the gross profits for its three casinos are slightly higher than the figures listed above. Besides its own namesake resort, Caesars Entertainment runs Harrah's and Tropicana.
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Source: www.casino.org
