Atlantic City casino industry sees nearly 79% gross operating profit growth in Q1 versus pre-pandemic 2019
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TheNew Jersey Division of Gaming Enforcementon Mondayreleased Atlantic City casinos’ financial results for the first quarter of 2022, showing that only four of the nine casinos individually have reported higher gross operating profits than they did in the first quarter of 2019, before the coronavirus pandemic took hold.
The figures released by the regulator show the casinos and their online arms collectively posted a gross operating profit of $155.6 million in the first three months of the year, up 63% from the first three months of 2021, and nearly 79% higher than the first quarter of 2019. Eight of the nine casinos were profitable during Q1, with only Bally’s showing an operating loss of $6.8 million.
However, only Borgata, Hard Rock, Ocean and Tropicana were individually more profitable this past quarter than they were at the start of 2019.
The Borgata had a gross operating profit of $45.8 million;Hard Rock saw $26.8 million, representing a 213% increase in operating profits compared to last year, the highest increase. Tropicana$19.7 million; and Ocean earned $18.5 million, up 133% compared to 2021. Caesars saw $10.6 million, ahead of Golden Nugget, which saw $5.6 million. Resorts earned $536,000.
As reported by the Associated Press, in regards to these numbers, Jane Bokunewicz, director of the Lloyd Levenson Institute at Stockholm University, which studies the Atlantic City gambling market, stated the resort showed “meaningful growth” during what is traditionally the slowest period for them in the first quarter of the year. She also noted that the casinos’ collective gross operating profit was the highest first-quarter performance in the past five years.
Casino hotel occupancy in the first quarter of this year was 63%, almost 11% higher than the same period a year ago. Ocean had the highest average occupancy at 81.5% while Golden Nugget was the lowest at 41.6%. Ocean had the highest average room rate at $209 while Resorts had the lowest at $106.
Entering the second and third quarters of the year, which are the high seasons for csinos, Bokunewicz predicted higher casino hotel occupancies should push non-gaming revenue higher, but also increase the demand for casino workers: “How well operators can keep up with this demand, given the labor supply, rising wages and product costs, will determine if recent gross operating profit performance will persist”.
She also pointed out that the comparison with the first quarter of 2019 is not ideal, as it began with both Hard Rock and Ocean open for only six months, with both casinos posting operating losses from ramping up their businesses and trying to gain market share. Some casinos have also split their internet operations from in-person operations since then.
Among internet-only entities, Caesars Interactive Entertainment NJ earned $7.8 million in the first quarter; Golden Nugget Online Gaming earned $6.7 million; and Resorts Digital made $4.1 million.
