Atlantic City casino profits declined by nearly 10% in first quarter of 2024

May 22, 2024 4:02 PM
Photo: Shutterstock
  • Wayne Parry, Associated Press
May 22, 2024 4:02 PM
  • Wayne Parry, Associated Press

ATLANTIC CITY, N.J. (AP) — Atlantic City’s casinos saw their collective profits decline by nearly 10% in the first quarter of this year, and only two of the nine casinos were more profitable than they were a year ago, figures released Wednesday by state gambling regulators show.

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The nine casinos posted a collective gross operating profit of $140.4 million in the first three months of 2024, a decline of 9.6% from the same period in 2023.

When internet-only entities are included, the collective profit is $155.4 million, down 8.7% from a year earlier.

Gross operating profit reflects earnings before interest, taxes, depreciation and other charges, and is a widely accepted measure of profitability in the Atlantic City gambling industry.

Jane Bokunewicz, director of the Lloyd Levenson Institute at Stockton University, which studies the Atlantic City gambling market, cited several factors for the sluggish profits. They include “an increase in the cost of doing business, inflation, and a potential shift in revenue mix to operations like lodging and food and beverage that traditionally have narrower profit margins.”

James Plousis, chairman of the New Jersey Casino Control Commission, raised many of the same points, citing labor contracts signed a few years ago that provided significantly higher wages to casino workers along with the increased cost of goods casinos must purchase.

Two of the casinos posted operating losses in the first quarter: Bally’s lost $2.5 million compared to an $88,000 profit a year ago, and Resorts posted a $1.2 million loss, compared to a $284,000 loss a year ago.

Two casinos saw their gross operating profit increase in the first quarter: Hard Rock was up 18.3% to $26.2 million, and Ocean was up 1.2% to $24 million.

Golden Nugget’s gross operating profit was down 51.7% to $2.3 million; Tropicana was down 25.4% to $12.5 million; Harrah’s was down 12.3% to $16.9 million; Borgata was down 10.1% to $51.7 million, and Caesars was down 7% to $10.5 million.

Among internet-only entities, Caesars Interactive Entertainment NJ was up 5.9% to $7.2 million, and Resorts Digital was down 3.2% to $7.7 million.

Hard Rock has the highest hotel occupancy in the first quarter at nearly 81%. Golden Nugget had the lowest at 47.2%.

The Ocean casino had the highest average hotel room price at $224.31, while Golden Nugget had the least expensive at $93.68.

Bokunewicz said Atlantic City’s casinos sold 10,000 more room nights in the first three months of 2024 than in the same period of 2023, despite a nearly $8 year-over-year increase in average daily room rate.