Report adds to industry concerns about declining profits at Atlantic City casinos in 2023
Atlantic City casinos' net income increased last year, but the increase was not enough to offset increased overhead expenses. This resulted in a year-on-year decline in profits.
The New Jersey Division of Gaming Enforcement (DGE) announced today that nine casinos in Atlantic City will operate year-round. The figures include revenue from casino operations and resort hotel rooms, food and beverages and entertainment.
Net sales at nine physical properties increased nearly 3% to $3.23 billion. But higher labor and delivery costs dented their bottom line, resulting in total operating profit of $744.7 million, down 1.6% from 2022.
Of the nine casinos, only three — MGM Resorts’ Borgata, Ocean Casino Resort and Bally’s — saw profit growth.
Borgata's profit rose 1.3% to $226.1 million, while Ocean's operating results rose 22% to $117.3 million. Following major renovations at the Boardwalk property, Bally's profits grew 689% from a loss of $1.9 million in 2022 to a profit of $11.1 million last year.
The other six casinos saw year-over-year profit declines, ranging from 2% at the Hard Rock to 55% at the Resorts. However, every casino is profitable.
Profits were slightly higher at Caesars Entertainment's three hotels (Caesars, Harrah's, Tropicana) and resorts, as the companies disclose their iGaming and online sports betting revenue through separate entities.
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James Plousis, chairman of the New Jersey Casino Control Board, which oversees DGE, said 2023 results were still strong despite lower profits. He said total profits of $744.7 million were the second highest in the past six years, and 2023 was the third consecutive year that net sales exceeded $3 billion.
"Each casino-hotel delivered positive total operating profit in 2023 while facing strong competition for customers," Prusis said in a statement. "Casinos are reinvesting in their properties to increase their operating margins." Exciting new attractions and attractive accommodations.”
The CCC president said he visited the casino during the winter and was pleased with what he saw.
These reinvestments will be key to impressing guests and maintaining a positive vibe this coming summer. "
DGE's filing also showed improvements in casino room occupancy. A total of 4,069,412 rooms were sold across nine properties, an increase of 3.7% compared to 2022. The average price also increased from $178 to $181.
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While Prusis cited some reasons for optimism, other data points raise greater industry concerns. The alarm comes as state lawmakers continue to consider whether to ban smoking in casinos, which resorts say would further hurt profits and possibly lead to layoffs.
Jane Bokunewicz, director of the Lloyd D. Levenson Institute for Gaming, Hospitality and Tourism (LIGHT) at Stockton University, said 2023 earnings reports show casino operations in Atlantic City costs become higher. While guest costs rose nearly 3% to $3.2 billion, consumer spending didn't keep pace.
Only four of the nine casinos — Borgata, Hard Rock, Ocean and Tropicana — reported higher profits in 2023 than in 2019.
The number of casino hotel room sales also remains well below pre-pandemic levels. The nine hotels booked about 4.3 million rooms in 2019, albeit at a much cheaper average price of $142.
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Source: www.casino.org
