Atlantic City Casino News: Profits Further Shrink, But All Nine Resorts in the Black

Posted on: November 22, 2024, 02:52h. 

Last updated on: November 22, 2024, 02:54h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

It hasn’t been a good week for the nine casinos in Atlantic City. After the New Jersey Division of Gaming Enforcement (DGE), the state’s casino regulator and industry monitor, reported on Tuesday that in-person gaming revenue was down 8.5% in October, the DGE added on Friday that gross operating profits for the nine properties down the shore collectively shrunk during the third quarter.

Atlantic City casinos profit reports
A woman plays a slot machine at Bally’s Atlantic City. The nine casinos in Atlantic City saw their operating profits shrink in the third quarter of 2024, but all nine remained profitable. (Image: AP)

Net revenue, or income from gaming, hotel rooms, food and beverage, and entertainment, slid 2.5% to a little more than $925 million during July, August, and September. Higher costs because of inflation paired with reduced revenue led to gross operating profits tumbling 13.8% to approximately $236.6 million.

Gross profits reflect earnings before interest, taxes, depreciation, amortization, affiliate charges, and other miscellaneous items as reflected on each casino licensee’s income statement. It is a widely accepted measure of profitability in the Atlantic City gaming sector, the DGE said.

Only two of the nine casinos reported stronger bottom lines in Q3. Hard Rock’s profit of $45.4 million was a 2.4% year-over-year gain while Caesars’ $23.5 million operating profit represented an 11.2% improvement.

The other casinos saw their profits decline from 10.9% at Bally’s to as bad as 43.8% for Golden Nugget.

(Image: NJDGE)

Hotel Rates Plummet

Despite the operational headwinds, all nine casinos through three quarters remained profitable. Net revenue was flat at $2.54 billion, while profits declined 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 reported an 84.1% occupancy rate, a 1.5% decrease from the same quarter last year. The rooms went for considerably less money, as the average nightly rate in 2024 Q3 was $201, $17, or almost 8% cheaper, than the $218 going rate in 2023 Q3.

Ocean commanded the highest rate at $336. Golden Nugget offered the cheapest rooms at $125.

AC Challenges

Atlantic City’s casino industry faces a slew of ongoing challenges. They include increased regional gaming competition, inflation, higher labor costs amid a labor shortage, higher overall overhead for goods and third-party services, and a shift in consumer preferences in the COVID-19 aftermath.

While in-person casino revenue through 10 months was down 1.6% to $2.36 billion, a difference of more than $38.7 million, online casino revenue was up almost 24% to $1.94 billion. iGaming platforms won almost $373.3 million more than they did during the same 10 months last year.

Sports betting also continues to grow. Garden State oddsmakers won over $912.8 million between January and October 2024, a 14% increase, or over $111.5 million.

Atlantic City casinos share much of their iGaming and sports betting win with their third-party partners like DraftKings, FanDuel, BetMGM, and Caesars Sportsbook.