The latest data from the New Jersey Division of Gaming Enforcement paints a concerning picture for Atlantic City, as released figures indicate a near 14% decline in casino operating profits during the third quarter.
Despite steady net revenues compared to last year, they have not halted the downturn in gross operating profit. By the second quarter’s close, operators noted a nearly 5% year-over-year decrease in gross operating profit, which deepened to almost 9% by the third quarter’s end.
The ongoing struggles of the casinos can largely be attributed to shifting economic conditions and consumer preferences in the wake of the COVID-19 pandemic. Many people have shifted to online gambling, wherein casinos must share profits with external parties rather than retaining all earnings.
Only Two Atlantic City Casinos See Profits Increase YOY
In the third quarter, all nine casinos managed to remain profitable. However, only Caesars and Hard Rock reported a rise in operating profits compared to the previous year.
Hard Rock saw a 2.4% increase, reaching $45.4 million in profit, while Caesars boosted its operating profit by 11.2% to $23.5 million. Other casinos suffered profit declines, ranging from nearly an 11% drop at Bally's to an almost 44% decrease at Golden Nugget.
"For the third consecutive year, Atlantic City's net revenue surpassed $2.5 billion in the first nine months of the calendar," noted James Plousis, Chairman of the New Jersey Casino Control Commission. "Atlantic City casinos reported $242.9 million in gross operating profit during the third quarter, with every casino achieving profitability both in the third quarter and year-to-date."
New Jersey’s Casinos Profitable … But
Here’s a closer look at the numbers from the NJDGE.
In the third quarter, New Jersey's casinos generated a net revenue of $943 million, reflecting a 3% decline from previous figures. Among the top performers, Borgata's revenue remained stable at $218 million, while Hard Rock experienced a slight decrease of 2% to $166 million. Meanwhile, Ocean Resort's revenue dipped by 2%, totaling $147 million.
Over the first nine months of 2024, the collective net revenue of the state's casinos reached $2.5 billion, marking a minor decline of 0.2%. Borgata continued to lead with $593 million, although this represented a 0.4% reduction. Conversely, Hard Rock saw a growth of 5%, amassing $456 million, and Ocean Resort improved by 1%, reaching $377 million.
In terms of gross operating profit for Q3, the casinos reported a total of $243 million, down by 14%. Borgata reached a profit of $60 million despite an 18% drop, whereas Hard Rock increased its profit by 2% to $45 million. Ocean Resort experienced a 15% decrease, with profits amounting to $37 million.
For the first nine months of 2024, the gross operating profit summed up to $577 million, a decline of 9%. Borgata once again led with $167 million, down by 7%, while Hard Rock's profit surged by 10% to $107 million. Ocean Resort, however, saw a decrease of 16%, with profits standing at $76 million.
New Jersey iGaming Sets Record
In a record-breaking month, New Jersey's online gaming operators outpaced Atlantic City casinos, generating $214 million in revenue. This is a big jump from last October's $167 million, marking a 28% increase. So far this year, revenue has risen 24%, climbing from $1.57 billion to $1.95 billion.
Every casino licensee saw at least a 15% revenue boost in October. Golden Nugget, partnered with online casinos like BetRivers, Betway and FanDuel, topped the list with $67 million in revenue. Hard Rock recorded the highest year-on-year growth.
