Brick-And-Mortar Casino Revenue In Atlantic City Continues To Decline In Q3

On Friday, the New Jersey Division of Gaming Enforcement released the Atlantic City casino industry’s third-quarter financial reports, and once again the news was uninspiring.

Third quarter net revenue for the 12 casinos in the city — the only casinos in the entire state — showed collective revenue of $943.2 million, which was down almost 3% compared to the same quarter in 2023.

Gross operating profits for the industry fared even worse in the third quarter, falling by 13.6% from third quarter 2023 to $242.9 million. This number reflects earnings before interest, taxes, depreciation, amortization, and charges from casino affiliates, among other items. As the DGE press release notes, the gross operating profit number “is a widely accepted measure of profitability in the Atlantic City gaming industry.”

For the calendar year 2024, gross profits are at $576.6 million, down 8.8% compared to the first nine months of 2023.

Even hotel occupancy has slipped slightly, from 75.2% at this point in 2023 to 74.1% so far in 2024.

It could be worse …

This scenario is not nearly as dire as a decade ago, when five of what were then Atlantic City’s 12 casinos shuttered amid faltering revenue. In 2018, Hard Rock Casino opened from the shell of Trump Taj Mahal, while Ocean Casino debuted at the site of the ill-fated Revel casino project.

All nine current casinos were profitable in the third quarter, although only Caesars and Hard Rock improved their numbers from the same quarter in 2023.

Perennial market leader Borgata’s third quarter operating profit of $60 million was down 18%, while (relative) newcomers Hard Rock and Ocean placed second and third at $45.4 million and $36.5 million, respectively.

Tropicana claimed fourth place at $30.5 million, and Caesars climbed to fifth at $23.5 million to pass sister casino Harrah’s ($22.6 million).

The bottom tier was well back, with Bally’s at $6.5 million, Golden Nugget — down 44% off third quarter 2023 — at $6.2 million, and Resorts — the state’s first casino when it opened in 1978 — winning a mere $4.9 million.

The slip in profits may have been impacted by the lack of large-scale events such as beach concerts or the formerly popular air show, Jane Bokunewicz, the director of the Lloyd Levenson Institute at Stockton University, told the Associated Press.

“Consumer demand may have been an issue for Atlantic City’s casino operators in summer 2024,” Bokunewicz said.

Average hotel rates in the third quarter ranged from $335.63 for Ocean Casino to a bargain $124.70 at Golden Nugget.

Another indicator and possible warning signal for the industry is that only three casinos — Borgata, Ocean, and Hard Rock — took in more revenue in October 2024 than they did in the pre-COVID-19 world of 2019.

Online casino revenue — only about one-third of which goes directly into the pockets of casino operators — surpassed retail casino revenue for the first time in October, and that trend figures to continue.