Caesars CEO Does Not Mince Words: Atlantic City ‘Feels Soft’

Written By David Danzis on November 2, 2023 - Last Updated on January 19, 2024
Photo of Caesars CEO Thomas Reeg, who mentioned during a recent earnings call that Atlantic City

Even after investing north of $400 million in a trio of Atlantic City casinos, Caesars Entertainment sounds less than bullish about the market’s current condition.

During the company’s most recent earnings call, CEO Thomas Reeg singled out Atlantic City as an example of a regional casino market that is underperforming.

While gambling destinations such as Las Vegas have bounced back in a big way post-pandemic, Atlantic City has been relatively stagnant, with only two of the resort’s nine casinos consistently generating more in-person revenue now than before COVID-19 upended the hospitality industry.

“If you want to hang your hat on something that feels soft, Atlantic City feels soft, but that’s not particularly news at this point,” Reeg said.

Caesars has spent $428 million on its Atlantic City casinos since 2020

Reno-based Caesars Entertainment operates three Atlantic City casinosCaesars Atlantic City, Harrah’s Resort Atlantic City, Tropicana Atlantic City — and has spent a reported $428 million at those properties since 2020. Nearly $240 million of that total has been spent at Caesars Atlantic City, which the company considers its flagship property in the market.

In the last three years, Caesars Entertainment has renovated more than 1,200 guest rooms and suites, added nearly a dozen food and beverage options and brought in Atlantic City’s first year-round live entertainment residency, all while updating everything from hotel lobbies to rooftop pools.

Last fall, at the East Coast Gaming Congress in Atlantic City, Reeg expressed optimism that the citywide capital expenditure would pay off for Caesars Entertainment.

“We’re about a third of this market,” Reeg said, “and as everybody knows, this is a market where all of its leaders have seen competitive products open within the last 15 years.

“So the bar has been raised in terms of what it takes to compete here, and we’re extremely pleased that our physical properties within Caesars can now meet that challenge.”

Lady Luck is a fickle mistress

Thus far, the plan has produced mixed results.

As Reeg noted in the Oct. 31 earnings call, Atlantic City is treading water and that is not a revelation at this point.

Collectively, properties here are generating more in-person AC casino revenue now ($2.17 billion through September) than they were at the same point in 2019 ($2.05 billion). But six of the nine casinos are down in 2023 compared to 2019.

Ocean Casino Resort has almost doubled ($157M to $307M, +95.7%) its reported gaming revenue, while Hard Rock Hotel & Casino Atlantic City has increased its in-person win by 54% ($250M to $385M). Borgata Hotel Casino & Spa, the AC market leader for nearly two decades, is up 3.4% in four years.

Reigning over the AC casino empire

The results for the three Caesars Entertainment Atlantic City properties are less favorable.

In August 2019, all three of the Caesars Entertainment properties (which pre-date the company’s current ownership) generated more than $30 million in gambling revenue, led by Tropicana Atlantic City at $31.6 million and followed by Harrah’s Atlantic City at $31.1M and Caesars at $30.9M.

By August 2022, all three posted monthly revenue of less than $26 million. In August 2023, none of the three Caesars AC casinos reported $25 million from in-person winnings.

Year-to-date retail gambling revenue from all three casinos has been trending in the wrong direction. From the first nine months of 2019 compared to that same period in 2023, Caesars AC is down 11%, Harrah’s has dipped more than 17% and Tropicana has fallen by almost 21%.

Digital gambling on the rise

It is not all bad news for Caesars in Atlantic City or New Jersey, for that matter.

Caesars boasts mobile platforms in both the NJ sports betting and NJ online casino industries. The company recently launched a standalone online casino — Caesars Online Casino NJ — to complement its existing Caesars Sportsbook NJ.

Online gambling revenue reported by Caesars’ online entities has continued to grow (and evolve) in the last few years. According to public data, internet gambling revenue generated by Caesars Interactive Entertainment and Tropicana has risen by 71% and 90%, respectively, since 2019.

Photo by Andrew Harnik / AP Photo
David Danzis Avatar
Written by
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.

View all posts by David Danzis
Privacy Policy