Gaming revenue crosses $500M mark in August
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“As in past months, strong returns from the internet gaming sector pushed total casino industry gross gaming revenue (GGR) to new heights,” said Jane Bokunewicz, faculty director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism (LIGHT), Stockton University School of Businesses, in her analysis of August 2023 numbers released Sept. 15 by the state Division of Gaming Enforcement.
“At more than $500 million, August GGR set a new near-term record for any single month total GGR,” commented Bokunewicz.
Some of the topline numbers from the August report include:
- GGR of $531.5 million – a 12.9% increase from August 2022
- Casino win for the nine properties was $280.3 million – a 2.3% increase over last August
- Internet gaming win of $155.3 million – an 18.1% jump over August 2022
- Sports wagering handle of $725.8 million and sports wagering gross revenue of $96 million – a 47.1% increase versus August 2022
Last month, the three top performing casinos in terms of casino win – a key metric to determine the health of foot traffic in casinos were:
- Borgata: $73 million, up 1.5% over last August
- Hard Rock: $50.7 million, up 10.7% over last August
- Ocean Casino Resort: $39.5 million, up 8.1% over last August
“Atlantic City’s total gaming revenue in August exceeded $500 million for only the second time in history and it is on pace for a very strong year,” said New Jersey Casino Control Commission Chairman James Plousis in his remarks following the release of the gaming report. “The casino hotels reported their second highest total gaming revenue since inception and their highest result in 18 years. The city recorded its fourth-highest monthly internet gaming win and its best monthly sports wagering revenue since inception.”
Plousis also noted casino win reached its second-highest result for the month of August in nine years.
“With slot machine win recording its highest result for the month of August since 2013,” said Plousis. “Year-to-date, the casino hotels reported their highest casino win in 10 years.”
Increased costs
“Year-to-date total GGR, at more than $3.4 billion, was likewise impressive, far outpacing the same period in the last 12 years, and, with four months remaining, outperforming total year-end GGR for every year between 2011 and 2020,” Bokunewicz explained. “If New Jersey follows nationwide trends, we may be looking at the industry’s best year for GGR in more than a decade. Though impressive, this record GGR hasn’t seemed to directly translate into profit growth for Atlantic City’s casino operators. Despite record high GGR, GOP [gross operating profit] was down year-over-year in the second quarter.”
Casino operators and analysts have pointed to the increased costs, especially for labor, as reasons why these sky-high revenue numbers are not leading to profit growth.
Bokunewicz noted that while August brick-and-mortar revenues increased year-over-year – and exceeded August 2021 – the number did fall short of pre-pandemic August 2019 ($286.5 million)
“Despite a year-over-year decline in July, strong returns early in the year propelled the year-to-date brick-and-mortar revenue to more than $1.92 billion outpacing every year since 2013 ($1.96 billion) – the last summer before the introduction of internet gaming later that year,” said Bokunewicz.
In her analysis, Bokunewicz stressed how internet gaming has become an increasing share of revenue for Atlantic City’s casino operators – highlighting that at the peak of this summer’s tourism season, GGR from internet gaming represented nearly a third (32.7%) of the industry total for the period.
“We will have to wait and see how summer brick-and-mortar GGR totals – sometimes used as a proxy for tourism volume in the resort – translate into third-quarter profit for the casino industry and tax revenues for the city and state,” said Bokunewicz. “With continued economic pressures, we should not be surprised to see a small decline in GOP, although we can expect to see increases in tax revenue generated since internet gaming revenue is taxed at a different, higher rate than the casino industry’s other revenue streams.”
“Comparing Atlantic City’s results from the three summer months to prior years, this summer’s casino win and total gaming revenue both reached their highest levels in a decade,” said Plousis. “While results from some operators were mixed, overall, the summer has been encouraging for Atlantic City and the region.”
