NJ Data Shows Atlantic City Casino Revenue Dip In 2023

Article by : Erik Gibbs Apr 15, 2024

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Data released by the New Jersey Division of Gaming Enforcement on Monday unveiled a troubling trend for Atlantic City’s renowned casinos: a dip in profitability throughout 2023 compared to the previous year, despite the state’s flourishing online gambling market.

In total, the nine Atlantic City casinos recorded a collective gross operating profit of $744.7 million for 2023, marking a slight 1.6% downturn from 2022. This decrease further widened to 4.1% when accounting for two internet-only entities associated with some of the casinos, resulting in total earnings of $780 million.

Although all nine casinos managed to remain profitable throughout 2023, only three experienced an uptick in profitability. This discrepancy underscores the ongoing challenges faced by the industry, despite the evident expansion of online gambling.

Jane Bokunewicz, who oversees the Lloyd Levenson Institute at Stockton University and is a leading authority on the Atlantic City gambling scene, voiced concerns about the recent findings.

According to the Associated Press, she said the data suggested a concerning pattern. The operation of New Jersey’s casinos is growing more expensive, and patron spending is failing to match the rising costs.

Bokunewicz pointed to mounting operational expenditures, encompassing rising wages and procurement costs, alongside escalated investments in initiatives to attract and retain customers, such as offering complimentary play, accommodations, dining and beverages.

Despite these significant outlays, there has not been a commensurate rise in consumer expenditure, as initially projected.

The release of these statistics is expected to reignite discussions surrounding smoking regulations within Atlantic City’s casino premises. Recently, a coalition of casino workers, backed by the United Auto Workers Union, lodged a lawsuit aiming to challenge a clause in New Jersey’s indoor smoking legislation that grants casinos an exemption.

Advocates argue that implementing a smoking ban could potentially bolster revenue and job prospects, citing successful precedents in states where casinos operate smoke-free environments.

Conversely, casinos argue that implementing a smoking ban would put them at a competitive disadvantage compared to neighboring states’ casinos, potentially leading to a loss in revenue and jobs. Smoking restrictions are likely to be strongly opposed within the industry, especially given the current decline in profitability.

The leading casino in terms of operating profit was the Borgata, raking in $226.1 million, a modest increase of 1.3%.

Following closely were Hard Rock with $125.5 million (down 2%), Ocean with $117.2 million (a significant surge of about 22%), Tropicana with $93 million (a notable decline of 15.1%), and Harrah’s with $80 million (a decrease of 9.7%).

Caesars, Bally’s and Resorts Casino Hotel reported operating profits of $51.7 million, $11.1 million and $9.5 million, respectively.

Only four of the nine casinos—Borgata, Hard Rock, Ocean and Tropicana—reported higher profits in 2023 compared to 2019’s pre-pandemic levels. Moreover, the industry is grappling with mounting challenges stemming from escalated operational expenses, particularly in the wake of significant wage hikes for employees in 2022.

In 2023, the average occupancy rate across the nine casino hotels hovered around 73%. Notably, Hard Rock boasted the highest average occupancy rate, at an impressive 88.8%.

In stark contrast, Golden Nugget recorded the lowest rate at a meager 53.8%. As for room rates, the average stood at $180.67, with prices ranging from $123.31 at Golden Nugget to $270.31 at Ocean.