Posted on: May 24, 2021, 02:12h.
Last updated on: May 24, 2021, 03:12h.
Atlantic City is on a rebound. The city’s nine casinos collectively posted a gross operating profit of more than $95.4 million in the first three months of the year.
The New Jersey Division of Gaming Enforcement says gross operating profits reflect earnings before interest, taxes, depreciation, amortization, affiliate charges, and other miscellaneous items shown on each casino license’s income statement. “It is a widely accepted measure of profitability in the Atlantic City gaming industry,” the state gaming regulator explains.
With all nine casinos being forced to close in March of 2020, the three-month period was an easy comparable. The $95.4 million in profits represents a 221.9 percent surge in the same three months in 2020. Profits totaled $29.6 million in Q1 of 2020.
A fairer comparison is the first quarter in 2019. And profits for the first quarter of this year were still 11 percent higher than two years ago.
The strength of internet gaming and the safe return of tourists to Atlantic City are a powerful combination,” James Plousis, chairman of the New Jersey Casino Control Commission, told the AP.
Gross profits increased despite the casino resorts generating less net revenue, which dropped 5.4 percent from $597.2 million to $564.6 million.
Borgata Leads in Revenue
MGM Resorts’ lone property in Atlantic City was the top profit earner. Borgata posted a quarterly profit of more than $29 million, a 28 percent year-over-year increase.
Caesars Entertainment also enjoyed a strong three months. Tropicana profits climbed 128 percent to $16.2 million, Harrah’s soared 224 percent to $9.5 million, and Caesars’ profits skyrocketed 1,448 percent to $8.1 million. Combined, the three Caesars casinos reported profits of $33.8 million for the newly formed casino firm.
Hard Rock’s profits came in at $8.6 million, Ocean Casino was just shy of $8 million, and Golden Nugget was $4.7 million in the black. The only casino to post a profit loss was Bally’s, which Caesars sold last year to Twin River Worldwide Holdings. That’s a Rhode Island-based casino operator that subsequently changed its corporate identity to the Bally’s Corporation.
Bally’s reported a profit loss of $6.5 million, down from a more than $8 million loss in 2020.
Resorts Need More Visitors
Atlantic City casinos have managed to turn profitable in 2021. But internet gaming and sports betting are playing a critical role in the rebound. The brick-and-mortar resorts desperately want people to again fill up their hotel rooms and seats in front of their slot machines and table games.
The occupancy rate for the nine Atlantic City casinos and their 15,105 hotel rooms was only 52.4 percent in Q1. That’s down significantly from 68.1 percent experienced in the same three months in 2020.
Plousis is optimistic people will return, as COVID-19 restrictions are lifted and the summer months arrive.
Last week’s lifting of casino capacity restrictions bolsters confidence for a strong recovery this summer,” Plousis said.
The occupancy numbers are an improvement in the final quarter of 2020 when the rooms were booked just 46.3 percent of the time. Average nightly rates are also increasing. They have gone from $121.58 in Q4 of 2020 to $130.74 in the first quarter of 2021.