Atlantic City casinos face a significant downturn as third-quarter earnings plummet by 14%. This decline raises concerns about the industry’s stability and future prospects in the region.
Key Takeaways:
- Atlantic City casino profits drop 14% in Q3 2023
- Borgata Hotel Casino & Spa experiences the largest decline
- Online gambling and sports betting show continued growth
Atlantic City’s casino industry has hit a rough patch, with third-quarter profits falling by 14% compared to the same period last year. This decline comes as a stark reminder of the challenges facing brick-and-mortar casinos in an increasingly digital gambling landscape.
The New Jersey Division of Gaming Enforcement reported that the nine casinos in Atlantic City collectively earned $281.2 million in gross operating profit for the third quarter of 2023. This figure represents a significant decrease from the $322.2 million earned in the same period in 2022.
Gross operating profit reflects earnings before interest, taxes, depreciation, and other charges, and is widely considered a key indicator of profitability in the Atlantic City casino industry.
The Borgata Hotel Casino & Spa, traditionally one of Atlantic City’s top performers, experienced the most substantial decline. The MGM Resorts-owned property saw its gross operating profit plummet by nearly 52%, dropping from $73.5 million in Q3 2022 to $35.3 million in Q3 2023.
Despite the overall downturn, some properties managed to buck the trend. Resorts Casino Hotel saw a modest increase in profits, rising from $7.8 million to $8.6 million. Meanwhile, Golden Nugget Atlantic City’s profits remained relatively stable, dipping slightly from $11.5 million to $11.3 million.
The Hard Rock Hotel & Casino Atlantic City maintained its position as the top-earning casino in the city for the quarter, despite a 4.8% decrease in profits to $44.3 million.
While traditional casino operations struggled, the report highlighted continued growth in online gambling and sports betting. These digital sectors have become increasingly important revenue streams for Atlantic City’s casinos, particularly in the wake of the COVID-19 pandemic, which accelerated the shift towards online gaming.
The industry’s performance for the first nine months of 2023 paints a slightly less gloomy picture, with gross operating profits down by a more modest 4.2% compared to the same period in 2022.
Hotel occupancy rates for the quarter averaged 86.5%, a slight decrease from 87.7% in Q3 2022. The Ocean Casino Resort boasted the highest average room rate at $270.75, while Resorts had the lowest at $148.90.
As Atlantic City’s casinos navigate these challenging times, industry analysts are closely watching how operators will adapt their strategies to reverse the downward trend and capitalize on the growing digital gambling market.
The coming months will be crucial for Atlantic City’s casino industry as it seeks to regain its footing and ensure its long-term viability in an increasingly competitive and digitally-driven gambling landscape.
