Atlantic City Casino Profits Have Declined: Financials Reveal Profits Are Down 15% In Q1 of 2023

Updated: 19 Casino

Is this a blip on the radar or a larger trend?

Atlantic City Casino Profits Have Declined: Financials Reveal Profits Are Down 15% In Q1 of 2023

Racheal Grazias // Shutterstock

John Brennan US Gambling News Editor

John is our gambling industry expert for New Jersey bringing the breaking news in all things NJ online gaming

While the New Jersey Division of Gaming Enforcement's monthly revenue reports for Atlantic City's nine casinos - the only ones in the entire state - provide valuable insight, the agency's quarterly reports offer a sharper focus on each casino's bottom line.

That is, what sort of gross operating profits are the casinos making?

Last week's release of the state's audit for the first three months of 2023 showed a 15% decline in such profits compared to the same period in 2022 - down from a collective $159 million to $135.4 million.

New Jersey Casino Control Commission chairman James Plousis said in a statement that an increase in variety of costs this year had an impact - most notably last summer's landmark labor agreement across the industry that has led to significantly higher wages for employees such as housekeepers, bartenders, and beverage servers.

“Compared to the first quarter last year, the casino hotels are employing more people and a progressive labor agreement was reached,” Plousis said. “These steps are emblematic of an industry that is preparing for growth and success.”

In fact, companies across the U.S. have found it difficult to retain employees, so a failure to reach a new contract would have led to difficult consequences.

In a major upset, five-year-old Ocean casino became the industry's leading profit-maker in the first quarter of 2023, surpassing longtime king Borgata which opened 20 years ago.

Ocean's profits were $23.6 million, up more than 25% over the same period in 2022. Borgata, meanwhile, settled for $22.8 million profit - down just over 50% from a year earlier.

Hard Rock, the city's other five-year profit, came in right behind at $22.2 million - but that figure was down almost 20%.

The news was better at Harrah's, a Marina District property that checked in at $19.3 million - up more than 20% over early 2022. That enabled Harrah's to leapfrog Tropicana, which at $16.8 million was down about 15%.

Caesars claimed the sixth spot at $11.4 million, up slightly from a year ago, while Golden Nugget was next at $4.8 million.

Bally's achieved a milestone of sorts, with a modest $88,000 profit that nonetheless is quite an improvement over last year's loss of $6.8 million.

The lone casino to lose money in the first quarter of 2023 was the city's oldest, Resorts. Coming off its recent 45th-anniversary celebration, Resorts executives had little to cheer about over slipping from a $527,000 profit to a $284,000 loss.

Gross operating profit reflects "EBITDA" - earnings before interest, taxes, depreciation, and amortization.

The city’s hotel occupancy rate was up from 63.1% in the first quarter of 2022 to 65.2% this year. 

The average room rate for the quarter was $156.53 (up from $152.20 in Q1 2022), with ranges from $113.15 at Golden Nugget to $212.17 just up the Boardwalk at Ocean casino.

The low $125.81 average rate at Hard Rock, another Boardwalk property, was coupled with an industry-best 84.8% occupancy rate.

The summer months of June, July, and August, of course, always wind up as the key period for the seasonal Atlantic City casino industry.

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