Atlantic City casinos reported lower profits in 2023 than the previous year, despite help from the state’s booming online gambling market.
The nine casinos reported combined gross operating profits of $744.7 million in 2023, down 1.6% from 2022, according to figures released Monday by the New Jersey Division of Gaming Enforcement. Including two Internet specialist companies that work with several casinos, profits were $780 million, a 4.1% decline in profitability.
All nine casinos were profitable in 2023, but only three had increased revenue.
Online gambling revenue soars in Atlantic City, while in-person gambling continues to slump
Gross operating profit represents earnings before interest, taxes, depreciation, and other expenses and is a widely accepted measure of profitability in the Atlantic City casino industry.
Jane Bochnewicz, director of Stockton University’s Lloyd Levenson Institute, which studies Atlantic City’s gambling market, said the numbers suggest “New Jersey casinos are becoming more expensive to operate, and patron spending may not be keeping pace.” It suggests sex.”
“The same factors that are tightening the purse strings of tourists, such as inflation and rising consumer prices, are forcing operators to deepen their pockets,” she says.
A gambler plays a slot machine at Harrah’s Casino on September 29, 2023 in Atlantic City, New Jersey. Atlantic City’s nine casinos collectively reported gross operating profits of $744.7 million in 2023, according to figures released by the New Jersey Gambling Regulatory Authority on April 8, 2024. , will decrease by 1.6% from 2022. (AP Photo/Wayne Parry)
Bochnewicz said the industry expects to see higher operating costs, such as higher wages and more expensive products, as well as increased spending on customer acquisition and retention, such as offering free play, room, food and beverages to customers. This was not offset by a significant increase in consumer spending. for.
This statistic is sure to be used in the ongoing battle over whether smoking should continue to be allowed in Atlantic City casinos. A casino workers group that has been lobbying the state Legislature for more than three years to pass a law that would remove a provision of New Jersey’s indoor smoking law that exempts casinos recently tried a new tactic.
Last week, the employees and the United Auto Workers union, which represents workers at three casinos, filed a lawsuit to overturn the law.
Casinos argue that banning smoking would put them at a competitive disadvantage against casinos in neighboring states, resulting in a loss of revenue and jobs.
But workers cite a study of the experience of casinos in some states that ban smoking and outperform competitors that allow smoking.
Borgata had the largest operating profit of $226.1 million (up 1.3%), followed by Hard Rock ($125.5 million (down 2%)). Ocean ($117.2 million, up about 22%). Tropicana ($93 million, -15.1%). Harrah’s ($80 million, -9.7%). Caesars ($51.7 million, -14.4%); Bally’s ($11.1 million, down $1.8 million a year ago), Resorts ($9.5 million, down 54.8%).
Among internet-only companies, Caesars Interactive Entertainment New Jersey was down nearly 28% to $23.6 million, and Resorts Digital was down 20.5% to $12.2 million.
And only four of the nine casinos had higher profits in 2023 than in 2019, before the outbreak of the coronavirus pandemic: Borgata, Hard Rock, Ocean, and Tropicana.
The casino also operates under a contract reached in 2022 that gives workers significant raises.
The occupancy rate of the nine casino hotels in 2023 was 73%, down 0.4% from the previous year. Hard Rock had the highest average occupancy at 88.8%, while Golden Nugget had the lowest at 53.8%.
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The average price for a casino hotel stay in Atlantic City last year was $180.67. Golden Nugget had the lowest average rate at $123.31, and Ocean had the highest at $270.31.
