Can AC casinos hold on through the rest of the pandemic?
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When the coronavirus pandemic first took hold of the Garden State in March, Atlantic City's nine casinos were ordered closed.
Following more than three months of zero gaming activity indoors, and still dealing with capacity and amenity restrictions, nine casinos continue to operate heading into the new year. And industry observers don't expect any of the gaming halls to fold before New Jersey fights its way out of the health crisis.
"As long as the casinos can just stay open for a few months — it looks like there's a light at the end of the tunnel — I don't think there will be any closings in Atlantic City," said Jane Bokunewicz, coordinator of the Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism at Stockton University. "Even with restrictions, every single casino in Atlantic city in the third quarter did have a positive gross operating profit."
July, August and September casino earnings, though, were down 37% compared to the same quarter in 2019, according to figures from the Division of Gaming Enforcement. Nearly every casino posted a gross operating profit decline for the quarter. Ocean Resort's earnings actually jumped by more than 100% year to year.
For the month of October, total gaming revenue climbed 15% compared to the same month in 2019, DGE data show. Internet gaming brought in $93.5 million for the casinos in October, representing a 106.7% year-over-year increase, while casinos saw in-person winnings dip.
"Online gaming is still expanding, that's really the saving grace for Atlantic City," said Roger Gros, publisher of Global Gaming Business magazine.
While casinos were forced to be closed until July 2, online gaming and sports betting were able to continue. Borgata was the last AC casino to reopen, on July 26.
The occupancy rate at the casino hotels was recorded at 72.9% for the third quarter of 2020. It was nearly 91% a year prior.
Bokunewicz said the casinos typically count on conventions to fill rooms midweek, but COVID-19 restrictions have made large gatherings impossible for most of 2020.
"It's a big part of the business that is, of course, hurting the casinos now," she said.
Conventions and trade shows represent more than $1.9 billion in economic impact to the city.
Even during these less-than-joyous times, a number of casino properties in the city are offering special holiday hotel packages for guests. Hard Rock Hotel & Casino, meanwhile, is bringing back live music — "A Motown Christmas" — on select dates starting Dec. 11, and Tropicana is continuing its tradition of an indoor holiday light show.
Heading into the pandemic, Atlantic City's casino market was on a significant upswing, following a period of multiple casino closures.
"Atlantic City casinos had an impressive 21 consecutive months of revenue growth," said Steve Callender, president of the Casino Association of New Jersey.
Casinos continue to operate at 25% capacity, with other safety measures in place, but the casino floors can operate around the clock. Callender said that despite restrictions, casinos continue to work to give their guests an exciting experience.
"However, it will be important to resume indoor dining after 10 p.m. in Atlantic City as soon as possible," Callender said. "Dining after 10 p.m. is very common in a city like Atlantic City and once it resumes, it will provide a much-needed economic boost and bring back more jobs to the city."
Considered a drive-in destination, Atlantic City is expected to fare better than other casino jurisdictions in the country. The resort city ranked No. 3 on Tripadvisor's Seasonal Travel Index for Fall 2020.
