ATLANTIC CITY, N.J. — The latest financial report from the New Jersey Division of Gaming Enforcement indicates a significant decline in operating profits for Atlantic City’s casinos during the third quarter of this year. The numbers show a decrease of nearly 14%, with the total gross operating profit for the nine casinos reaching $236.5 million, reflecting a drop of 13.8% compared to the same period last year.
The downturn in profits underscores ongoing challenges faced by these establishments, stemming from economic pressures and shifting consumer behaviors in the aftermath of the COVID-19 pandemic. A notable trend is the migration of customers to online gambling platforms. These platforms require sharing winnings with external entities, which diminishes the profits retained by traditional casinos.
Despite the overall profitability of all nine casinos in the third quarter, only two of them—Caesars and Hard Rock—experienced an increase in their operating profits when juxtaposed with the previous year.
Jane Bokunewicz, director of the Lloyd Levenson Institute at Stockton University, remarked that weakened consumer demand appeared to affect the casinos during the summer of 2024. She highlighted a decline in average hotel room rates by $17, suggesting that casinos may have lowered prices to entice visitors. Furthermore, the absence of major tourism events such as the annual air show and significant beach concerts likely played a role in the reduced visitor influx, she added.
Additionally, revenue from non-gaming sources also saw a decline in the third quarter, totaling $511.6 million, which is down 5% from the same timeframe last year. Traditionally, this segment performs robustly during the summer months.
James Plousis, chairman of the New Jersey Casino Control Commission, noted that the continued pressure from high operational costs has contributed to lower profits in comparison to the same quarter last year. Gross operating profit is calculated before deductions for interest, taxes, and depreciation, and is a common measure used to gauge profitability within Atlantic City’s gaming sector.
Breaking down the profits, the Borgata lead with an operating profit of $60 million, despite a nearly 18% decline from the previous year. Hard Rock reported earnings of $45.4 million, marking a modest increase of 2.4%. Other notable figures included Ocean Casino Resort with a profit of $36.5 million (down 15.3%), Tropicana at $30.5 million (down nearly 17%), and Caesars reaching $23.5 million (up 11.2%). Harrah’s earning $22.6 million (down nearly 25%), Bally’s at $6.5 million (down nearly 11%), Golden Nugget with $6.2 million (down nearly 44%), and Resorts generating $4.9 million (down 32.6%).
For internet-only ventures, Caesars Interactive NJ reported a profit of $4.8 million (down 7.8%), while Resorts Digital, previously the online division of Resorts, earned $1.5 million (down 4.8%).
Cumulatively, the casinos’ gross operating profit for the first nine months of 2023 stands at $547 million, representing a decrease of 9.2% from the same period in the previous year.
When looking at hotel performance, Ocean Casino Resort boasted the highest average nightly room rate of $335.63, while Golden Nugget had the lowest rate at $124.70. On average, the nine casinos recorded a rate of $201.08. Hard Rock achieved the highest occupancy rate at 95.1%, contrasting with Golden Nugget’s lower occupancy of 66.4%.
