Atlantic City’s nine casinos are on pace to eclipse $3 billion in total gaming revenue this year, a mark not reached since 2012, when there were a dozen casinos.
Through September, the city’s casinos have reported more than $2.46 billion in total gaming revenue, according to data from the state Division of Gaming Enforcement, up 15.8 percent over the same period a year ago.
It helps to have online gaming and sports betting to pump up the volume for the physical casinos. “We continued to see gains in sports betting and tourism numbers this summer, with gaming revenue increasing over 16 percent compared to last summer,” said Steve Callender, president of the Casino Association of New Jersey (CANJ) and senior vice president of operations for the East Region of Tropicana Atlantic City’s parent company, Eldorado Resorts Inc. “We believe this excitement will continue into the fall season as all major sports are in full swing.”
James Plousis, chairman of the state Casino Control Commission, added that capital investments and an emphasis on customer service contributed.
The industry has reported revenue increases for 16 consecutive months, going back to the openings of Hard Rock Hotel & Casino Atlantic City and Ocean Casino Resort in June 2018.
Rummy Pandit, executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton University, said the revenue milestone was “an achievement and a feat that we need to celebrate.”
“We’ve been positioned to surpass $3 billion for the last few months,” he said. “Despite growing competition and the fact that other areas might have sports betting or online gaming, Atlantic City is becoming a destination resort.”
While online gaming and sports betting have contributed to overall revenue increases, table and slot revenues, or casino win, have declined for the seven properties that were operational before the openings of Hard Rock and Ocean. However, the losses have been offset by the revenue generated from the two newer casinos.
To date, Hard Rock has generated $250 million from table games and slots, while Ocean has reported just shy of $157 million. Casino win for the entire market through September is up more than 8.5 percent over the same period last year.
The $3 billion gaming revenue benchmark is also significant for Atlantic City because the city will receive additional payment-in-lieu-of-tax (PILOT) funding. The city will receive an additional $20 million, or nearly $152 million, from the casinos if total gaming revenue surpasses $3 billion this year. However, a crediting mechanism built into the PILOT legislation will negate a significant portion—about $14 million — of that increased revenue since the city will receive nothing in terms of investment alternative tax to pay down debt obligations.
To offset the good news, gross operating profits — a widely accepted measure of profitability in the industry — declined 16.8 percent through the first six months of 2019 compared to the same period last year. This year’s third-quarter results will be released November 22.
