ATLANTIC CITY, NJ
Atlantic City casinos collectively saw their profitability increase in the first quarter of this year compared not only to the previous year, but also to the pre-pandemic period, according to figures released Monday.
But only four of the nine casinos individually reported higher gross operating profits than in the first quarter of 2019, before the coronavirus pandemic took hold.
Figures released by the New Jersey Division of Gaming Enforcement show that casinos and their online branches collectively recorded gross operating profit of $155.6 million in the first three months of this year.
That’s a 63% increase from the first three months of 2021 and nearly 79% from the first quarter of 2019. (The pandemic forced Atlantic City casinos to close for 3.5 months from from mid-March 2020, so 2019 is a more useful point of comparison.)
Still, the news was not all good. Only four casinos – Borgata, Hard Rock, Ocean and Tropicana – were more profitable in the first quarter of this year than they were at the start of 2019.
Gross operating profit represents earnings before interest, taxes, depreciation, and other expenses and is a widely accepted measure of profitability in the Atlantic City gaming industry.
Eight of the nine casinos were profitable in the first quarter of this year, with only Bally’s posting an operating loss of $6.8 million.
The Borgata had a gross operating profit of $45.8 million; Hard Rock earned $26.8 million; Tropicana earned $19.7 million; Ocean won $18.5 million; Harrah’s earned $15.9 million; Caesars earned $10.6 million; Golden Nugget won $5.6 million; and resorts earned $536,000.
Hard Rock posted the largest percentage increase in operating profit over last year, up nearly 213%. The ocean has increased by more than 133%.
Jane Bokunewicz, director of the University of Stockton’s Lloyd Levenson Institute, which studies the Atlantic City gambling market, said the station has shown “significant growth” during what is traditionally the period slowest for them in the first quarter of the year.
She also noted that the casinos’ collective gross operating profit was the strongest performance in the first quarter of the past five years.
“As operators continued to face labor shortages in the first quarter, they had to find creative ways to meet consumer demand with fewer employees,” she said. . “The strong gross operating profit in the first quarter indicates that they have struck an effective balance between staffing levels and business volume.”
Heading into the second and third quarters of the year, the period when casinos make the most money, Bokunewicz said, increased casino hotel occupancy should boost non-core revenue. gambling, but also increase the demand for casino workers.
“The ability of operators to meet this demand, given labor supply, rising wages and product costs, will determine whether the recent gross operating profit performance persists,” he said. she declared.
Bokunewicz said the comparison to the first quarter of 2019 wasn’t ideal either. The first quarter of 2019 started with Hard Rock and Ocean open for just six months, with both casinos posting operating losses as they expanded their businesses and tried to gain market share. And some casinos have separated their internet operations from their in-person operations since then.
Casino hotel occupancy in the first quarter of this year was 63%, nearly 11% higher than the same period a year ago. Ocean had the highest average occupancy at 81.5% while Golden Nugget was the lowest at 41.6%
Ocean had the highest average rate at $209, while resorts had the lowest at $106.
Among Internet-only entities, Caesars Interactive Entertainment NJ earned $7.8 million in the first quarter; Golden Nugget Online Gaming earned $6.7 million; and Resorts Digital grossed $4.1 million.
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