Posted on: May 23, 2024, 03:49h.
Last updated on: May 22, 2024, 04:50h.
Atlantic City casino profits totaled $140.5 million in the first quarter, a nearly 10% year-over-year reduction.
Despite net revenue climbing 2% to $740.1 million, the nine casinos saw their bottom links shrink. State officials blamed ongoing inflation that’s pushed overhead costs higher.
Well-known increases in the cost of labor, as well as goods and services purchased by the Atlantic City casino hotels, continue to pressure profits,” James Plousis, chair of the New Jersey Casino Control Commission, said in prepared remarks provided to Casino.org.
Seven of the nine casinos remained profitable, with Resorts and Bally’s being the exceptions. Bally’s lost almost $2.5 million running its Boardwalk property.
Resorts, however, reports its online gaming and sports betting business separately. While the city’s oldest brick-and-mortar casino reported a $1.2 million operating loss, Resorts Digital offset the financial damage with a $7.7 million profit.
Borgata Leads, Hard Rock Gains
MGM Resorts’ Borgata remained the most profitable in town. The Marina District destination made $51.7 million for its parent company, though that was 10% lower than the first quarter of 2023.
Hard Rock was one of only two casinos to experience a year-over-year profit gain. Hard Rock made $26.2 million — up 18% — while Ocean’s profits climbed 1% to nearly $24 million.
Rounding out the rest are Harrah’s at $16.9 million (-12%), Tropicana at $12.5 million (-25%), Caesars at $10.6 million (-7%), and Golden Nugget at $2.3 million (-52%).
Caesars Entertainment also reports its online gaming operations separately. Caesars Interactive Entertainment reported a quarterly profit of $7.2 million, a 6% year-over-year improvement.
Atlantic City casinos collectively offered 15,514 hotel guestrooms as of March 31. During the three months, the rooms were occupied 64.8% of the time on an average nightly rate of $164.
Before the pandemic, the Atlantic City casino hotel occupancy rate was slightly higher at 72.6% but on a much cheaper nightly rate of $126. Casino hotels were booked 63% of the time in Q1 2022 at $152 and 65% in 2023 at $156.
Plousis says Atlantic City casinos continue to invest in new amenities and that’s bringing in more people and allowing the resorts to charge more for their rooms.
“The strong competition that exists in this market has been good. In-person visitation grew during this period, demonstrated by increases in luxury tax, occupancy fees, and occupied hotel rooms,” Plousis explained.
Busy Season Arrives
Atlantic City casinos are betting big on a prosperous summer season, typically the busiest time of the year for the New Jersey gaming industry.
Bally’s celebrates its 45th anniversary this summer and is commemorating it by unveiling its major property overhaul. Borgata recently upgraded its Long Bar and Caesars is opening Buddy’s Boardwalk Empire at Harrah’s.
Golden Nugget is amid phase one of its room renovation, Resorts completed a renovation of its outdoor LandShark Bar & Grill, and Hard Rock and Ocean recently invested in restoring their beaches.
Recent high-quality investments in the casino hotel facilities provide plenty of reasons to visit Atlantic City during the exciting summer season,” Plousis added.
A financial turnaround is needed, as profits for the nine casinos in 2023 slid nearly 2% despite revenue increasing 3%. Just three casinos — Borgata, Ocean, and Bally’s — reported profit increases.
