Posted on: August 23, 2024, 09:23h.
Last updated on: August 23, 2024, 09:38h.
The nine casinos in Atlantic City increased revenue during the second quarter of 2024 but the added funds weren’t nearly enough to offset higher operating costs.
The New Jersey Division of Gaming Enforcement (DGE) reports that net revenue for the nine casinos and Caesars and Resorts’ iGaming-only entities totaled $829.7 million, a 1.3% increase from the second quarter of 2023. Despite the higher revenue, the casinos and iGaming businesses saw their gross operating profits collectively decline by 1.7%.
Operators everywhere continue to feel pressure from the increased cost of goods and services that they purchase,” said James Plousis, chair of the New Jersey Casino Control Commission. “All operators were profitable, even though Atlantic City’s quarterly gross operating profits dipped in comparison to the second quarter last year.”
Only four of the 11 entities reported better year-over-year profit margins — Bally’s, Borgata, Hard Rock, and Resorts Digital.
The DGE says gross operating profits reflect earnings before interest, taxes, depreciation, amortization, charges from affiliates, and other miscellaneous items as reflected on each casino licensee’s income statement, which is a widely accepted measure of profitability in the Atlantic City gaming industry.
Net revenue includes each casino’s revenue from gaming, hotel stays, food and beverage, entertainment, and retail leases.
Atlantic City Midyear Checkpoint
Inflation continued to cut into the Atlantic City gaming industry’s bottom line during the first half of 2024. Industrywide revenue climbed 1.5% to more than $1.6 billion, but profits tumbled 4.9% to $333.7 million.
With a strong second quarter from Bally’s, which turned around its financial performance by improving profits by 49% from April through June, all nine casinos were profitable in the first half of 2024.
Only two casinos managed to turn a better profit through six months of 2024 than they did in 2023. Borgata continues to lose market share to Hard Rock, but the casino operated by MGM Resorts trimmed its overhead to improve its bottom line by 1.4% to $106 million.
Hard Rock was the other resort in the black, as its profits soared over 17% to $62 million.
Hard Rock has become the go-to Boardwalk spot for overnight travelers, as the property’s half-year occupancy rate of 86.4% bested its competition by 6.9%. Hard Rock’s 1,973 rooms were occupied on an average nightly rate of $167. The casino sold 309,849 room nights between January and June.
Borgata’s 2,727 rooms were occupied just 71% of the time at an average rate of $175. But with more rooms, the casino counted 352,692 occupied room nights to lead the industry.
Summer Slowdown
The summer is Atlantic City’s busy season, but 2024 hasn’t gone as expected for the gaming resorts.
The nine casinos reported last week that July brick-and-mortar gross gaming revenue from in-person slot machines and table games totaled $272.3 million, a 6.1% decrease from July 2023. Slot revenue, a more accurate predictor of the gaming economy than tables, as the latter can experience a poor month simply because of bad house luck, fell almost 5%. Tables were down 10%.
“While many were hopeful that the summer of 2024 for Atlantic City casinos would see a rebound in drive-in visitors after last year’s trend of people taking their ‘dream vacation’ and flying to destinations, the July in-person gaming numbers suggest that is not the case,” said Jane Bokunewicz, director of Stockton University’s Lloyd D. Levenson Institute of Gaming, Hospitality, and Tourism.
