Casino profit is new evidence of stabilization

ATLANTIC CITY, N.J. » Atlantic City’s casinos appear to be getting their groove back.

The casinos saw their gross operating profits increase by 7.3 percent in 2016, according to figures released Friday by the state Division of Gaming Enforcement.

The eight casinos that began the year earned an operating profit of more than $587 million. When the Trump Taj Mahal casino, which closed in October, is removed from the equation, the figure rises to a 9 percent profit increase for the surviving seven casinos.

Coupled with a 1.5 percent increase in the amount the casinos won from gamblers last year, Friday’s figures are the latest encouraging news for a resort city that has had precious little of it in recent years.

The earnings were bolstered by a stronger-thanexpected fourth quarter, which is traditionally the slowest period of the year, and helped by continuing increases in internet gambling winnings by the casinos. For the final three months of 2016, the casinos saw a $116 million operating profit, an increase of 20.3 percent from the same period a year earlier.

“I am encouraged by these results and the stability that exists in the industry after many years of revenue declines,” said David Rebuck, the state’s gaming enforcement director. “When this recent operational momentum is combined with the growth in casino revenues thus far in 2017, especially from internet operations, I am optimistic that the casino hotels can continue to improve operating results during 2017.”

Matt Levinson, chairman of the New Jersey Casino Control Commission, called the fourth-quarter results “a strong finish to a very good year.” Including third-party sales at casinos from businesses that rent space there, as well as hotel room revenue, Levinson said the casinos generated $3.7 billion in economic activity last year.

The figures provide new evidence that Atlantic City’s casino industry is stabilizing after a brutal three-year period in which five of its 12 casinos shut down. With less competition, and the added revenue from online operations, the surviving seven casinos are regaining their footing.

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

The Borgata posted the largest operating profit at nearly $245 million, an increase of 13.3 percent from 2015. And casino president Tom Ballance said the Borgata is off to a roaring start so far in 2017, with March being the 14-year-old casino’s best-ever month for $40 million in gross slot machine winnings.

Harrah’s was next at $119 million, although that was down 3 percent from a year earlier. Caesars saw an $80 million profit, down 3.7 percent; Tropicana’s profit was $53.7 percent, up 15.7 percent; Bally’s had a $38.9 million profit, down 2.5 percent; Golden Nugget has a $28.9 million profit, up 28.1 percent; and Resorts had an $18.7 million profit, up 20.1 percent.

The Taj Mahal, which closed on Oct. 10, went from a $3.1 million operating profit in 2015 to a $5.5 million loss for the 9 ½ months it was open in 2016.