Data released by the New Jersey Division of Gaming Enforcement (DGE) on August 22 reveals that gross operating profits for Atlantic City’s nine casinos plunged 16.8 percent from January through June, ending at $245.1 million, a decrease of $49.3 million.
Ocean Casino Resort lost nearly $1.2 million during April, May and June, the only casino in the city to report a gross operating loss for the quarter, according to Associated Press.
Gross operating profits reflect earnings before interest, taxes, depreciation, amortization, charges from affiliates, and other miscellaneous items as reflected on each casino licensees’ income statement. It is a widely-accepted measure of profitability.
Between 2014 and 2016, five of the then-12 casinos went out of business, and the remaining seven did well in a smaller market, where less competition meant higher profits for the survivors.
Casino profits from gaming, hotel stays, food and beverage, and entertainment also fell, according to Casino.org. For the second quarter of 2019, the industry’s occupancy rate was 81.5 percent, a 3.3 point decrease from the prior period. The occupancy rate in the industry’s casino hotels for the six months ended June 2019 was 77.1 percent, which is 4.3 percentage points lower than the comparable period last year, based on DGE numbers.
Despite this, local officials in Atlantic City continue to try and paint a warm picture for the New Jersey casinos. “The market was still adjusting to the new level of competition through the second quarter,” said James Plousis, chairman of the New Jersey Casino Control Commission.
Plousis told the Press of Atlantic City that overall net revenue increased 18.2 percent during the quarter. He also pointed out the thousands of jobs and new amenities.
“We are making money now,” Michael Donovan, Ocean’s senior vice president and chief marketing officer, told the Associated Press. “We made money in June, we made money in July and we continue to make good money in August. Overall, we’re happy with the results.”
Hard Rock posted an operating profit of $11.2 million for the quarter. It has grabbed market share and now ranks as the No. 2 casino in Atlantic City in terms of gambling revenue, trailing only the perennial market leader Borgata.
“We are very pleased with our continued success and increased profitability,” said Hard Rock President Joe Lupo. But he cautioned that healthy increases in monthly revenue reports are not translating into big profits for many individual casinos because of third-party online providers who get part of that revenue.
