Atlantic City Casinos See Profits Dip 15% To Start 2023 After 2022 Decline

Written By David Danzis on May 23, 2023
arrow declining over atlantic city skyline

A stagnant gambling market and an uneasy national economy are impacting Atlantic City casinos, as the most recent financial reports highlight the industry’s ongoing struggles.

Atlantic City’s nine casinos collectively reported a 15% decline in first-quarter gross operating profits compared to 2022, according to data from the New Jersey Division of Gaming Enforcement. The casinos posted $135.4 million in GOP during the first three months of this year, a $23.6 million drop-off from 2022.

Net revenue ($756.6M) for the market went up 5% year-over-year. The occupancy (65.2%) and average hotel room rates ($156.53) increased, too.

The sum of gambling (including third-party internet gaming and sports betting), food and beverage, hotel rooms and entertainment make up the market’s reported net revenue. Meanwhile, GOP reflects earnings before interest, taxes and other costs, and is a widely accepted measure of industry profitability.

Atlantic City casinos finished 2022 with operating profits down nearly 5% for the year.

Gambling regulator sees silver linings in cloudy financial reports

James Plousis, chairman of the NJ Casino Control Commission, said that higher costs impact casino profits. Plousis noted that the first-quarter revenue returns represented a five-year high.

“Compared to the first quarter last year, the casino hotels are employing more people and a progressive labor agreement was reached. These steps are emblematic of an industry that is preparing for growth and success.”

All nine casinos signed new contracts last year with Unite Here Local 54, the industry’s largest labor union representing housekeepers, custodial workers, bartenders, porters and others. The union’s former president called it “the best contract we’ve ever had” when the deals were ratified in 2022.

Casino employment in March 2023 sat at 22,631 jobs, according to state data. In February 2020, just weeks before COVID-19 forced a three-and-a-half-month closure of all AC casinos, the market reported 26,686 jobs.

Atlantic City casinos spending big to bring back crowds

Plousis expressed optimism about recent investments by casino operators. He and others are confident that the more than $1.5 billion in capital improvements at AC casinos in the last couple of years will bear fruit this summer.

Jane Bokunewicz, faculty director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism (LIGHT) at Stockton University, said:

“If first-quarter, net-revenue performance gives us a first look at the upcoming tourism season, then we should expect to see continued efforts from operators as they seek to find their stride in managing the resurgence in consumer demand, the lingering labor shortage and the higher cost of labor — all of which are likely to impact the revenue/expense balance of the industry in coming months.”

AC’s struggles are not a new trend

The AC market’s gross gaming revenues have been a mixed bag for the better part of two years. PlayNJ has been reporting on Atlantic City’s COVID-recovery challenges since 2021.

Statewide, NJ online casinos and NJ sports betting have been growing by leaps and bounds. AC casino operators must report all revenue from online and sports betting but keep only some of it. An unknown percentage goes to third-party providers.

Meanwhile, brick-and-mortar gambling revenues are either falling or remaining flat. This result would be even worse if not for two casinos significantly outperforming previous returns. Strong returns from Hard Rock Atlantic City and Ocean Casino Resort have propped up the entire market since summer 2021.

Property-by-property 2023 1Q profit breakdown

Ocean’s reported GOP in the first period of 2023 was $23.6 million. That reflects a 27.6% Y-o-Y increase and the highest total in the market.

Borgata Hotel Casino & Spa, the market’s perennial leader for almost two decades, posted $22.8 million in profit for the quarter, a 50% decline from the $45.9 million last year.

Hard Rock also took a step back to start 2023. The Boardwalk casino posted $22.2 million in GOP, a decline of 17.5% compared to last year.

Bally’s Atlantic City turned a small profit ($88,000), a massive improvement (+101.3%) from the property’s $6.8 million in reported operating losses in the first quarter of 2022.

Harrah’s Resort Atlantic City ($19.3M, +21.2%) and Caesars Atlantic City ($11.4M, +7.2%) were also up in the first quarter. Tropicana Atlantic City ($16.8M, -15.3%) and Resorts Casino Hotel (-$284K, -153.9%) went the other way.

Golden Nugget Atlantic City cannot be compared to last year due to a reporting change with its former online entity, Golden Nugget Online Gaming. The Golden Nugget casino reported $4.8 million in GOP.

Caesars Interactive went backward (-13.2%) but still reported $6.8 million in the first quarter. Resorts Digital’s profits increased 5.9% from $7.5 million last year to $7.9 million in 2023.

Photo by PlayNJ
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David Danzis

David Danzis is the lead writer for PlayNJ. He is a New Jersey native and honors graduate of Rutgers University. As a newspaper reporter for the New Jersey Herald and Press of Atlantic City, David earned statewide awards for his coverage of politics, government, education, sports, and business. Today, he is PlayNJ’s Atlantic City “insider” and gaming industry expert on casinos, sports betting, and online gambling. David lives in Atlantic County, NJ with his wife and two children.

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