Atlantic City Casino Profits Slide in 2023, Report Adds to Concerns
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Posted on: April 8, 2024, 05:12h.
Last updated on: April 8, 2024, 05:12h.
Atlantic City casinos managed to increase their net revenue last year, but the higher income wasn’t enough to offset increased overhead. That led to year-over-year profit declines.
The New Jersey Division of Gaming Enforcement (DGE) today revealed full-year operating resorts for the nine casinos in Atlantic City. The data includes revenue from casino operations and the resorts’ hotel rooms, food and beverage, and entertainment.
The nine brick-and-mortar properties increased net revenue by almost 3% to $3.23 billion. But increased labor and supply costs dampened their bottom lines to a gross operating profit of $744.7 million, a 1.6% decline from 2022.
Of the nine casinos, just three — MGM Resorts’ Borgata, Ocean Casino Resort, and Bally’s — experienced profit improvements.
Borgata’s profit climbed 1.3% to $226.1 million and Ocean’s business performance increased 22% to $117.3 million. Bally’s profit skyrocketed 689% from a $1.9 million loss in 2022 to $11.1 million profit last year after the Boardwalk property underwent a major makeover.
The six other casinos experienced year-over-year profit declines ranging from 2% at Hard Rock to 55% at Resorts. However, every casino was profitable.
Caesars Entertainment’s three properties (Caesars, Harrah’s, Tropicana) and Resorts’ profits were slightly higher, as those companies disclosed their iGaming and online sports betting income through separate entities.
The Good
James Plousis, chair of the New Jersey Casino Control Commission that oversees the DGE, said 2023 was still a strong showing despite the profit declines. He said the $744.7 million collective profit ranked second in the past six years and 2023 marked the third year in a row that net revenue surpassed $3 billion.
Each casino hotel reported positive gross operating profits in 2023 while facing strong competition for customers,” Plousis said in a statement to Casino.org. “The casinos are reinvesting in their properties to add exciting new attractions and appealing accommodations.”
The CCC chair said he toured the casinos during the winter months and was pleased with what he saw.
Those reinvestments will be key to impressing guests and sustaining positive vibes during the upcoming summer season,” Plousis said.
The DGE filing also showed improvement in terms of casino room stays. The nine properties sold 4,069,412 rooms — up 3.7% from 2022. The average rate also climbed from $178 to $181.
The Bad
Though Plousis pointed out some reasons for optimism, other data points raise more concern for the industry. The alarms come as state lawmakers continue to consider whether to ban casino smoking, something the resorts say would further hurt profits and likely lead to layoffs.
Jane Bokunewicz, director of the Lloyd D. Levenson Institute of Gaming, Hospitality, and Tourism (LIGHT) at Stockton University, said the 2023 profit report demonstrates that it has become more expensive for casinos to do business in Atlantic City. And consumer spending isn’t keeping pace despite guest costs increasing nearly 3% to $3.2 billion.
Only four of the nine casinos — Borgata, Hard Rock, Ocean, and Tropicana — reported higher profits in 2023 than they did in 2019.
The number of casino hotel rooms sold also remains significantly suppressed to pre-pandemic levels. The same nine properties in 2019 booked about 4.3 million rooms, though the average rate was much cheaper at $142.
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