The startup costs for online gambling in New Jersey coupled with the closing of one casino in January resulted in an 8.4 percent decline in first quarter earnings for Atlantic City’s remaining 11 casinos.
The city’s casinos had a gross operating profit of $38.7 million for the quarter according to figures released by the New Jersey Division of Gaming Enforcement.
But without the 2013 earnings for the Atlantic Club, which closed in January, as well as losses by Caesars Interactive—which does not own a land-based casino itself—figured in, the picture looks better and the city’s remaining casinos actually saw an increase in gross operating profit of 4.6 percent for the quarter.
Caesars Interactive posted a $7.1 million loss due to startup and one-time costs associated with the launch of online gambling last November. The online company is listed separately from Caesars Entertainment’s four Atlantic City casinos
Gross operating profit reflects earnings before interest, taxes, depreciation, and other charges, and is a widely accepted indicator of profitability in the casino industry.
New Jersey’s online gambling industry won $43 million from gamblers through the end of April. However, online gambling figures appear to be leveling off as the new industry brought in $11.4 million in April compared with $11.9 million in March.
In a statement from the state Casino Control Commission, Matt Levinson, commission chairman pointed to the results from brick-and-mortar casinos that operated for the entire first quarter in 2014 and 2013 as a positive.
“After the winter we had, I am encouraged with these first quarter results,” he said. “Total revenue is flat and gross operating profits are up, even though snow virtually shut down the state several times, and there were significant startup expenses related to internet gaming.
“Despite the fact that New Jersey declared a weather-related state of emergency six times in the quarter, the occupancy rate is up for the industry,” Levinson said. “Casinos report higher food, beverage and entertainment revenue in the quarter; and third-party sales in the casinos are up by almost 6 percent. In addition, luxury tax collections in the quarter are up a healthy 5 percent compared to the same period a year ago, showing that the people are spending more money here and that is a positive sign for Atlantic City.”
The city’s casino hotels averaged 70 percent occupancy for the quarter, with Caesars posting the highest at 81 percent.
