Atlantic City casino earns bounce back after virus closures

Figures released Monday by the New Jersey Division of Gaming Enforcement show the casinos collectively posted a gross operating profit of $185.1 million in April, May and June of this year.

The casinos were closed for the entire second quarter of 2020 due to the coronavirus pandemic; they collectively posted an operating loss of $112.4 million for that quarter.

But compared with the second quarter of 2019, before the coronavirus was circulating, this year’s second-quarter profits were up more than 16%. It is a comparison many in the Atlantic City casino industry favor as more of an apples-to-apples assessment.
“With Atlantic City in the midst of recovery, especially considering where it was one year ago, all of the operators and their employees are to be commended for providing excellent customer experiences, first-class dining and entertainment, and a safe environment,” said James Plousis, chairman of the New Jersey Casino Control Commission.

Gross operating profit reflects earnings before interest, taxes, depreciation and other charges, and is a widely accepted measure of profitability in the Atlantic City casino industry.

Jane Bokunewicz, director of the Lloyd Levenson Institute at Stockton University, which studies gambling, said the second quarter operating profit is among the best in recent years. She is interested to see whether the highly contagious COVID-19 delta variant will impact casino operations and earnings over the remainder of the year.

The Borgata had the highest operating profit in the second quarter this year at more than $40 million, an amount almost identical to its loss last year in the same period.

Tropicana had a $28 million profit compared with an $11.8 million loss last year in the second quarter; Hard Rock had a $26.1 million profit compared with an $18.2 million loss last year; Harrah’s had a $24.8 million profit compared with a $15.1 million loss last year, and Caesars had an $18.5 million profit compared with a $9.9 million loss last year.
The Ocean casino had a profit of nearly $17 million compared with a loss of $11.8 million; the Golden Nugget had a $10.7 million profit compared with a $6 million loss, and Resorts had a $7.3 million profit compared with a $12.6 million loss.

Bally’s was the only Atlantic City casino to post an operating loss in the second quarter, losing nearly $3.5 million, down from the nearly $8.8 million it lost last year. The casino recently changed ownership and is in the midst of a multi-million dollar renovation.
Three internet-only entities all saw their operating profits decline in the second quarter, though all three remained profitable.

Caesars Interactive Entertainment NJ had a $4.4 million profit, down more than 43% from last year; Golden Nugget Online Gaming had a $7.8 million profit, down nearly 11%; and Resorts Digital had a $3.5 million profit, down over 38% from the second quarter of 2020.

For the first six months of this year, the casinos have posted an operating profit of $280.6 million, compared to a loss of $82.3 million over the same period last year.

The city’s collective casino hotel occupancy rate was 70% for the second quarter; the Ocean casino had the highest occupancy rate at nearly 95%, even as it had the highest average room rate at $217. Borgata had the lowest occupancy rate at just over 49%.