Atlantic City casinos pull in less, even with online games
ATLANTIC CITY, N.J. — Atlantic City’s casinos were less profitable in 2023 than they were a year earlier, even with help from the state’s booming online gambling market.
Figures released last week by the New Jersey Division of Gaming Enforcement show the nine casinos collectively reported a gross operating profit of $744.7 million in 2023, a decline of 1.6% from 2022. When two internet-only entities affiliated with several of the casinos are included, the decline in profitability was 4.1% on earnings of $780 million.
All nine casinos were profitable in 2023, but only three saw an increase in profitability.
Gross operating profit represents earnings before interest, taxes, depreciation, and other expenses, and is a widely accepted measure of profitability in the Atlantic City casino industry.
The figures “suggest it is getting more expensive for New Jersey’s casinos to operate, and patron spending may not be keeping pace,” said Jane Bokunewicz, director of the Lloyd Levenson Institute at Stockton University, which studies the Atlantic City gambling market.
“The same forces that might be tightening visitors’ purse strings — inflation, increased consumer prices — are also forcing operators to dig deeper into their pockets,” she said.
Bokunewicz said higher operational costs — including higher wages and more costly goods, combined with increased spending on customer acquisition and retention including and free play, rooms, meals and drinks for customers — have not been offset by as significant an increase in consumer spending as the industry hoped for.
The statistics are certain to be used in the battle over whether smoking should continue to be allowed in Atlantic City’s casinos. Casino workers who have pushed state lawmakers for over three years to pass a law eliminating a provision in New Jersey’s indoor smoking law that exempts casinos tried a new tactic.
This month the employees and the United Auto
Workers Union, which represents workers at three casinos, sued to overturn the law. The casinos say that ending smoking will place them at a competitive disadvantage to casinos in neighboring states, costing revenue and jobs. But workers cite a study of casinos in several states that ban smoking yet outperform competitors that allow it.
The Borgata had the largest operating profit at $226.1 million, up 1.3%, followed by Hard Rock ($125.5 million, down 2%); Ocean ($117.2 million, up nearly 22%); Tropicana ($93 million, down 15.1%); Harrah’s ($80 million, down 9.7%); Caesars ($51.7 million, down 14.4%); Bally’s ($11.1 million, compared to a loss of $1.8 million a year earlier), and Resorts ($9.5 million, down 54.8%).
Among internet-only entities, Caesars Interactive Entertainment NJ earned $23.6 million, down nearly 28%, and Resorts Digital earned $12.2 million, down 20.5%.
Only four of the casinos — Borgata, Hard Rock, Ocean and Tropicana — had higher profits in 2023 than in 2019, before the pandemic.