Published on: November 22, 2024, 02:52h.
Last updated on: November 22, 2024, 02:52h.
The nine Atlantic City casinos faced challenges as reported by the New Jersey Division of Gaming Enforcement (DGE). In-person gaming revenue dropped by 8.5% and gross operating profits decreased collectively during the third quarter.
Net revenue saw a 2.5% decline to over $925 million for July, August, and September. This decrease in revenue, combined with inflation-related higher costs, led to a 13.8% decrease in gross operating profits to around $236.6 million.
Operating profits represent earnings before certain charges, providing an essential measure of profitability in the Atlantic City gaming sector, according to the DGE.
Two of the nine casinos, Hard Rock and Caesars, reported stronger bottom lines in the third quarter. The remaining casinos experienced profit declines ranging from 10.9% to as much as 43.8%.
Hotel Rates Plummet
Despite challenges, all nine casinos remained profitable through the first three quarters. Although net revenue stayed flat at $2.54 billion, profits decreased by 9% to $576.6 million.
Atlantic City saw net revenue surpassing $2.5 billion in the first nine months for three consecutive years. Each casino remained profitable both quarterly and year-to-date,” said New Jersey Casino Control Commission chair James Plousis.
Plousis acknowledged the ongoing profit decline due to high costs.
“At the same time, pressure from continuing high costs can be seen in lower profits compared to the same period last year,” Plousis added.
Fewer visitors impacted room revenue for Atlantic City casinos.
The average nightly rate in Q3 2024 was $201, a drop from $218 in Q3 2023, with Ocean charging $336 and Golden Nugget offering rooms at $125.
AC Challenges
The Atlantic City casino industry faces several ongoing challenges, including increased regional competition, inflation, labor shortages, rising overhead costs, and changing consumer preferences post-COVID-19.
While in-person casino revenue decreased by 1.6%, online casino revenue surged by almost 24% to $1.94 billion. Sports betting revenue also increased by 14% to over $912.8 million between January and October 2024.
Atlantic City casinos share their sports betting and iGaming wins with partners like DraftKings and FanDuel.