Atlantic City Casino News: Profits Further Shrink, But All Nine Resorts in the Black
The nine casinos in Atlantic City have not had a good week. Following the report from the New Jersey Division of Gaming Enforcement (DGE) on Tuesday indicating a decline of 8.5% in in-person gaming revenue for October, the DGE noted on Friday that gross operating profits for the nine properties along the shore collectively decreased in the third quarter.
Net revenue, which includes income from gaming, hotel rooms, food and beverage, and entertainment, decreased by 2.5% to just over $925 million in July, August, and September. Increased expenses due to inflation combined with lower revenue caused gross operating profits to drop 13.8% to around $236.6 million.
Gross profits indicate earnings prior to interest, taxes, depreciation, amortization, affiliate fees, and other various items as shown on the income statement of each casino licensee. According to the DGE, it is a commonly recognized indicator of profitability in the Atlantic City gaming industry.
Just two out of the nine casinos indicated improved profits in Q3. Hard Rock earned a profit of $45.4 million, reflecting a 2.4% increase compared to the previous year, while Caesars’ operating profit of $23.5 million showed an 11.2% rise.
Other casinos experienced a profit drop from 10.9% at Bally’s to as much as 43.8% at Golden Nugget.
Hotel Prices Drop Sharply
In spite of the operational challenges, all nine casinos continued to be profitable through the first three quarters. Net revenue remained unchanged at $2.54 billion, whereas profits fell by 9% to $576.6 million.
"For the third consecutive year, Atlantic City’s net revenue exceeded $2.5 billion in the first nine months of the calendar. Every casino was profitable in both the third quarter and year-to-date,” said James Plousis, chair of the New Jersey Casino Control Commission, which oversees the DGE.
Plousis, however, conceded that profits continue to shrink.
“At the same time, pressure from continuing high costs can be seen in lower profits compared to the same period last year,” Plousis added.
Fewer visitors in Atlantic City led to reduced room revenue for the casinos.
The resorts indicated an occupancy rate of 84.1%, reflecting a 1.5% drop from the same quarter a year ago. The rooms sold for notably lower prices, as the average nightly rate in the third quarter of 2024 was $201, which is $17, or nearly 8% less than the $218 rate in the third quarter of 2023.
Ocean had the top rate at $336. Golden Nugget provided the lowest-priced rooms at $125.
AC Difficulties
Atlantic City's gambling sector encounters numerous persistent difficulties. These factors encompass heightened regional gaming rivalry, inflationary pressures, rising labor expenses due to workforce shortages, increased overall costs for products and third-party services, and a change in consumer preferences following the COVID-19 pandemic.
During the first 10 months, in-person casino earnings fell by 1.6% to $2.36 billion, a decline exceeding $38.7 million, whereas online casino earnings rose by nearly 24% to $1.94 billion. iGaming platforms generated approximately $373.3 million more than they earned in the identical 10-month period last year.
Wagering on sports is also on the rise. Garden State bookmakers earned more than $912.8 million from January to October 2024, marking a 14% rise, which is over $111.5 million.
Casinos in Atlantic City distribute a significant portion of their iGaming and sports betting profits with third-party partners such as DraftKings, FanDuel, BetMGM, and Caesars Sportsbook.
