NJ Q3 casino earns down 13%, but most surpass pre-COVID rate

The Telegraph
 
Super Slots

ATLANTIC CITY, N.J. (AP) — Atlantic City's casinos saw their third-quarter profitability decrease by more than 13% compared with a year ago, but there was encouraging news in figures released Tuesday by New Jersey gambling regulators.

Earnings numbers from the state Division of Gaming Enforcement show that the nine casinos collectively surpassed their level of profitability in the third quarter of 2019, before the coronavirus pandemic broke out.

And six of the nine individual casinos were more profitable this quarter than they were during the same period in 2019.

Comparing the health of their businesses to the pre-pandemic period has become a major obsession of Atlantic City casino executives as they strive to push what they consider their core business — winning money from in-person gamblers — ahead of where it was before COVID.

The casinos posted a collective gross operating profit of $269.2 million in the third quarter of this year, down 13.4% from a year earlier.

But it was better than the $239.4 million they posted in the third quarter of 2019.

Gross operating profit reflects earnings before interest, taxes, depreciation and other charges, and is a widely accepted measure of profitability in the Atlantic City gambling industry.

“Summer 2022 faced many headwinds, from shortages in staffing and supplies to increased gas prices and inflation,” said Jane Bokunewicz, director of the Lloyd Levenson Institute at Stockton University, which studies the Atlantic City gambling industry.

That was also when higher wages from a recently negotiated contract with the city's largest casino workers' union took effect.

“Coupled with reduced overall spending and other expenses, increased wages contributed to a very challenging summer for Atlantic City’s casino operators,” Bokunewicz said.

Hard Rock had the largest profit at over $44 million, down 4.8% from a year ago.

Hard Rock’s senior vice president of operations, Mike Sampson, credited “our commitment to live entertainment, with over 40 shows in the quarter,” coupled with strong performance in betting at slots and table games.

In other results, Tropicana earned $41.5 million, down 13.5% from a year earlier; Borgata earned just over $40 million, down over 30%; Ocean earned nearly $39 million, up 5%; Harrah's won $34.5 million, down 21.4%; Caesars earned $25.6 million, down 6.9%; Resorts earned $12.5 million, down 22.2%; Golden Nugget earned $11.5 million, down over 20%; and Bally's won $10.8 million, up 431% from $2 million.

George Papanier, president of casinos and resorts at Bally’s Corp., attributed much of that increase to capital investments including new slots, restaurants, hotel rooms and penthouse-style suites that debuted Memorial Day weekend.

For the first three quarters of this year, Atlantic City's casinos have earned $608.5 million, an increase of 2.7% from the same period last year.

The Ocean casinos had the highest average hotel room rate at $358.71, while Resorts had the lowest at $149.94.

Hard Rock had the highest hotel occupancy rate in the third quarter at nearly 98%, while Golden Nugget had the lowest at 66.8%.

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