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Atlantic City Casinos saw reduced profits in 2023 despite online gambling boom

Tuesday 09 de April 2024 / 12:00

2 minutos de lectura

(Atlantic City).- All nine Atlantic City's casinos were less profitable in 2023 than they were a year earlier, even with help from the state's booming online gambling market, according to figures released Monday by the New Jersey Division of Gaming Enforcement.

Atlantic City Casinos saw reduced profits in 2023 despite online gambling boom

Figures released Monday by the New Jersey Division of Gaming Enforcement show the nine casinos collectively reported a gross operating profit of $744.7 million in 2023, a decline of 1.6% from 2022. When two internet-only entities affiliated with several of the casinos are included, the decline in profitability was 4.1% on earnings of $780 million.

All nine casinos were profitable in 2023, but only three saw an increase in profitability.

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

The figures “suggest it is getting more expensive for New Jersey’s casinos to operate, and patron spending may not be keeping pace,” said Jane Bokunewicz, director of the Lloyd Levenson Institute at Stockton University, which studies the Atlantic City gambling market.

The same forces that might be tightening visitors’ purse strings — inflation, increased consumer prices — are also forcing operators to dig deeper into their pockets,” she said.

Bokunewicz said higher operational costs including increased wages and more costly goods, combined with increased spending on customer acquisition and retention including and free play, rooms, meals and drinks for customers have not been offset by as significant an increase in consumer spending as the industry hoped for.

The statistics are certain to be used in the ongoing battle over whether smoking should continue to be allowed in Atlantic City's casinos. A group of casino workers that has been pushing state lawmakers for over three years to pass a law eliminating a provision in New Jersey's indoor smoking law that exempts casinos recently tried a new tactic.

Last week the employees and the United Auto Workers Union, which represents workers at three casinos, filed a lawsuit to overturn the law.

The casinos say that ending smoking will place them at a competitive disadvantage to casinos in neighboring states, costing revenue and jobs.

But workers cite a study on the experience of casinos in several states that ban smoking and are outperforming competitors that allow it.

The Borgata had the largest operating profit at $226.1 million, up 1.3%, followed by Hard Rock ($125.5 million, down 2%); Ocean ($117.2 million, up nearly 22%); Tropicana ($93 million, down 15.1%); Harrah's ($80 million, down 9.7%); Caesars ($51.7 million, down 14.4%); Bally's ($11.1 million, compared to a loss of $1.8 million a year earlier), and Resorts ($9.5 million, down 54.8%).

Among internet-only entities, Caesars Interactive Entertainment NJ earned $23.6 million, down nearly 28%, and Resorts Digital earned $12.2 million, down 20.5%.

And only four of the nine casinos — Borgata, Hard Rock, Ocean and Tropicana, had higher profits in 2023 than they did in 2019, before the COVID19 pandemic broke out.

The casinos are also operating under a contract reached in 2022 that gave workers substantial pay raises.

The nine casino hotels had an occupancy rate of 73% in 2023, down 0.4% from a year earlier. Hard Rock had the highest average occupancy at 88.8%, while Golden Nugget had the lowest at 53.8%.

The average room in an Atlantic City casino hotel cost $180.67 last year. Golden Nugget had the lowest average rate at $123.31, while Ocean had the highest at $270.31.

By Wayne Parry


Tags: Sin tags

País: United States

Región: North America



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