ATLANTIC CITY, NJ (AP) — Atlantic City’s casinos saw profitability fall more than 13% year over year in the third quarter, but there was encouraging news in numbers released Tuesday by the New Jersey gaming regulator.
Earnings figures from the State Division of Gaming Enforcement show that the nine casinos collectively exceeded their profitability levels in the third quarter of 2019, before the coronavirus pandemic hit.
And six of the nine individual casinos were more profitable this quarter than in the same period in 2019.
Comparing the health of their businesses to pre-pandemic times has become a major obsession for Atlantic City casino executives as they strive to advance what they consider their core business — winning money from personal players — before the what it was before COVID.
The casinos reported collective gross operating income of $269.2 million in the third quarter of this year, down 13.4% year over year.
But it was better than the $239.4 million they posted in Q3 2019.
Gross Operating Profit reflects earnings before interest, taxes, depreciation and amortization and other charges and is a widely accepted measure of profitability in Atlantic City’s gaming industry.
“The summer of 2022 has faced many headwinds, from staffing and supply shortages to increased gas prices and inflation,” said Jane Bokunewicz, director of the Lloyd Levenson Institute at Stockton University, which studies Atlantic City’s gaming industry.
This is also when higher wages came into effect from a recently negotiated deal with the city’s largest casino workers’ union.
“Combined with lower overall spending and other expenses, higher wages contributed to a very challenging summer for Atlantic City’s casino operators,” Bokunewicz said.
Hard Rock had the largest profit at over $44 million, down 4.8% year over year.
Hard Rock senior vice president of operations Mike Sampson recognized “our commitment to live entertainment with over 40 shows in the quarter” coupled with a strong performance in slots and table games betting.
In other results, Tropicana earned $41.5 million, down 13.5% year over year; Borgata earned just over $40 million, down over 30%; Ocean earned nearly $39 million, up 5%; Harrah’s gained $34.5 million, down 21.4%; Caesars earned $25.6 million, down 6.9%; Resorts earned $12.5 million, down 22.2%; Golden Nugget earned $11.5 million, down over 20%; and Bally’s gained $10.8 million, up 431% from $2 million.
George Papanier, president of casinos and resorts at Bally’s Corp., attributed much of that increase to capital investments, including new slot machines, restaurants, hotel rooms and penthouse-style suites, which debuted over Memorial Day weekend.
In the first three quarters of this year, Atlantic City’s casinos earned $608.5 million, a 2.7% increase over the same period last year.
Ocean Casinos had the highest average hotel room rate at $358.71, while resorts had the lowest at $149.94.
Hard Rock had the highest hotel occupancy in the third quarter at nearly 98%, while Golden Nugget had the lowest at 66.8%.