The Fall of Atlantic City Casino Profits

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While the Division of Gaming Enforcement has reported an overall 7.5% fall in profits for all nine casinos and two internet-only ones, the future for this industry is still looking hopeful. To put it into numbers this third quarter was compared to the same period as last year, and while all of these casinos were not as profitable as last year, they still are, when compared to the recent COVID era.

Many experts agree that we are now seeing a stabilization in the casino industry. The past year could be seen as a big release following the looser regulations from Covid, and this year, while still great, can not compare to the previous onslaught on casinos. Coupled with new investments and regulations, it's easy to conclude why profits fell short.

Let's start with the online-only casinos, where Caesars Interactive Entertainment NJ and Resorts Digital had a rough year, competing with alternatives outside the US and nine physical counterparts. Caesars reported a bit over $5 million in profit, an 18% decrease from last year, and Resorts Digital recorded a painful 50% decrease, raking in only $1.6 million. When we put it all together, online and physical casinos earned $632 million, which may be impressive but is still a 4.2% decrease from last year.

So why do such drastic differences in gross and actual profits happen? Gross profits need to be reduced by taxes, fees, interest, adjusted for inflation, and other expenses. Some expenses are also 1000 new employees in the industry, which increased payroll expenses. Now, we are seeing the effect of the new labor law signed and enforced in July 2022.

The entire industry may be at a slight loss, but individual cases are mixed.

The Borgara was the most lucrative, with over $70 million in profit, but it was still a slight 1.7% down from 2022. Their accounting department has stated that they are making internal changes to how they handle their expenses. Their rent expenses were moved from operating expenses to non-expenses, and it's one of the reasons for their slight increase in gross profits.

Following up is the Hard Rock casino with a reported $44.3 million, an ever-so-slight increase of over 1% from 2022. Ocean Casino Resort also came close with $ 43 million in profits, a staggering 10% increase.

Jane Bokunewicz, director of the Lloyd Levenson Institute at Stockton University, confirmed that we may be entering a stabilization period, as the industry still earned more if we go back to the pre-2019 pandemic in both gross profit and net revenue. With that, all other casinos reported losses, ranging from big losses of over 40% from Resorts Casino Hotel with their $7.2 million profit to The Tropicana with over $36.5 million, a decrease of over 11%.

Harrah's reported a $30 million profit (a decrease of 13%), Caesar's cashed in on a $21 million profit (a decrease of 18%), Golden Nugget's books show $11 million profit (a decrease of 4%), and Bally's reported $7.3 million profits (a decrease of 32%).

Overall, this mixed bag contributed to the overall loss, but many casinos and hotels are looking favorably toward the non-gaming revenues, which are picking up the slack. All Atlantic City casinos and hotels made substantial investments towards their in-person resort experiences, as they realized that could be the driving factor towards more visits and thus, more profits.

These profits totaled almost $400 million ($399,6 million to be exact) in non-gaming revenues, which shows that investments in this area are starting to pay off and could contribute towards an increase in profits for 2024!

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