Atlantic City’s Casinos See Slight Dip in Q2 Earnings

Atlantic City’s casinos and two internet-only gambling operations experienced a slight decline in earnings during the second quarter of 2024, according to figures released on Thursday by the New Jersey Division of Gaming Enforcement. The collective gross operating profit for these entities fell by 1.3% compared to the same period in 2023, totaling $178.4 million.

Gross operating profit, a key measure of profitability in the gambling industry, represents earnings before interest, taxes, depreciation, and other expenses. Despite the decline, all nine casinos in Atlantic City remained profitable, though two-thirds of them reported reduced profits compared to the previous year.

James Plousis, chairman of the New Jersey Casino Control Commission, pointed to the rising costs of goods and services as a significant factor impacting profitability across the industry. “Operators everywhere continue to feel pressure from the increased cost of goods and services that they purchase,” Plousis noted, reflecting broader economic challenges affecting the sector.

Jane Bokunewicz, director of the Lloyd Levenson Institute at Stockton University, which specializes in studying the Atlantic City gambling industry, described the second-quarter results as “less encouraging than Atlantic City’s operators may have hoped.” Bokunewicz highlighted that while net revenue increased by 1.3%, this was not sufficient to boost overall profitability.

 

Performance Breakdown by Casino

Among the individual casinos, the Borgata led the pack with an operating profit of $54.3 million, marking a 15.5% increase from the same period last year. Hard Rock also saw a strong performance, earning $35.4 million, up 16.3%.

However, several other casinos experienced declines. The Tropicana reported a 7.7% drop in profit to $23 million, while Ocean saw a significant 33.2% decline to nearly $16 million. Harrah's earnings fell by 13% to $15.7 million, and Caesars saw a 4.5% decrease to $14.6 million. Golden Nugget's profit dropped by nearly 17% to $6.4 million, and Resorts recorded the steepest decline, with a 54% fall to $1.6 million. Bally's was a standout among smaller casinos, reporting a profit of $2.7 million, a more than 49% increase.

The two internet-only gambling entities showed mixed results. Caesars Interactive Entertainment NJ earned $6.6 million, down 3.1% from the previous year, while Resorts Digital saw a significant 66.3% increase in profit, earning $1.9 million.

 

“The second-quarter results were less encouraging than Atlantic City’s operators may have hoped, with rising costs continuing to pressure profitability despite a slight increase in net revenue.”

 

Year-to-Date Figures and Hotel Metrics

For the first half of 2024, Atlantic City’s casinos and online operations collectively earned $333.7 million, down nearly 5% from the same period in 2023.

In terms of hotel performance, Hard Rock boasted the highest occupancy rate during the second quarter, with nearly 92% of its rooms filled. In contrast, Golden Nugget had the lowest occupancy rate, at just over 52%. Ocean casino charged the highest average nightly room rate at $268.47, while Golden Nugget offered the lowest rate at $108.14.

The second quarter of 2024 presented a challenging environment for Atlantic City's gambling industry, with rising costs impacting profitability despite an overall increase in net revenue. As operators navigate these pressures, the coming months will be critical in determining whether the industry can regain its footing and return to stronger profitability.