Atlantic City Casino Profits Record a Decrease in Q3
Last week, the New Jersey Division of Gaming Enforcement (DGE) published the report for the third quarter of this year, revealing that casinos operating in Atlantic City ended the period recorded a drop in profit.
On the other hand, nine casinos doing business in Atlantic City saw their net revenue increase by 17.8% to $920 million during the three-month period ending on September 30. Since the beginning of the year, revenue went up to $2.2 billion, which is 6.4% more than in the corresponding period of 2017.
Numbers Going Down
The gross operating profit of these properties went down, dropping by 15.3% to $213.7 million in Q3. For the year-to-date, the profit reached $508.7 million, which is a decline of 9.3%.
Two new facilities were open this summer – Hard Rock Atlantic City and the Ocean Resort Casino – which had a significant impact on the quarter results. The two venues recorded combined revenue of $178.5 million, while their combined profits were $9.6 million.
When it comes to the other seven properties, not a single one managed to record an increase in revenue in Q3, while only two of them saw their profits go up. The Golden Nugget saw its profits jump by 6.6% to $13.6 million, while Bally’s recorded a slight increase of only 0.5% to $18.4 million.
The Tropicana was the biggest loser of the period, in terms of percentage, recording a drop in profit of 31.1% to $31.8 million, while Borgata earned $63.2 million, 21.7% less than in the same period of the last year.
Caesars Interactive Entertainment New Jersey and Resorts Digital online operations also recorded a decrease in profit during this quarter. Caesars Interactive Entertainment New Jersey will want to forget Q3 as soon as possible since its revenue dropped by 10.5% and profit by 69.4%. Resorts Digital performed even worse, with revenue dropping by 51.%, and profit by 83.3%! All of this happened despite the solid performance of New Jersey’s online market.
Last Year Was Much Better
The figures are very different from the same period of 2017 when profit recorded a rise of 17.6%,
However, many blamed the fact that five casinos went out of business quickly for such a result, although Q1 results didn’t see any improvement as profits were down by 11.7%. Again, winter storms had a significant impact on these number, which didn’t play any role in Q3. On the other hand, numbers in Q2 were a bit better, as the profit drop was at 4.6%.
Hotel occupancy on in the market recorded a decrease of 5.1% to 84.1% in the first nine months of the year, while the current situation will definitely force operators to invest more money in marketing, as the competition toughens.
Even before the two new properties in Atlantic City were open for business, many wondered if they could increase the whole market, or just be satisfied with the slices that other seven casinos give them.
The figures clearly indicate that revenue is going up, although the legalisation of sports betting in New Jersey, following the US Supreme Court’s mid-May ruling, contributed to growth.
It remains to be seen whether the situation in the market improves anytime soon.