We knew July would be big, but none of us knew how big.
The NJ Division of Gaming Enforcement cleared up the mystery this past week when it released the official revenue numbers for the state’s nine casinos.
And, according to those numbers, July was an explosive month. Revenue jumped 12.8 percent compared to July 2017, a massive gain in a state where revenue rises and falls no more than 3 percent per month. The addition of Hard Rock Atlantic City and Ocean Resort Casino certainly helped.
Rummy Pandit, executive director of Stockton University’s Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism, said that he believes both casinos performed well.
“Both properties posted strong numbers for their first full month of operations,” Pandit said in an interview with NJGamblingSites.com. “Each has succeeded in generating revenues competitive with their neighbors.”
Hard Rock wins big, Ocean Resort lags behind
In terms of total casino win, Hard Rock AC finished third behind Tropicana and Borgata.
The casino’s $32.38 million in casino win (excluding NJ online gambling revenue) was a little more than $1 million behind Tropicana.
Borgata, of course, took it’s customary position in front, notching $71 million in casino win.
Ocean Resort was on the opposite end of the revenue spectrum. The property’s $15.81 million in revenue was last among the nine casinos and about $2 million behind Resorts.
Market share matters
While revenue is the more attractive number to look at when judging a casino’s performance, market share is also important.
In our interview with Pandit, he noted that Hard Rock and Ocean Resort’s market share (12 percent and 6 percent, respectively) was in line with the range of market shares each casino shared before Hard Rock AC and Ocean opened.
“When considering casino gaming win alone, Hard Rock realized a 12 percent and Ocean Resort a 6 percent share of the market. This appears consistent with the city’s other gaming properties,” Pandit said. “With the exception of Borgata (26 percent), Atlantic City’s casinos each controlled between six and 12 percent of revenues from casino gaming win in July 2018.”
Looking ahead to the rest of the year, Pandit said he expects Hard Rock and Ocean Resort’s market shares to hold steady, while the other properties decline a bit moving toward December.
“We should expect to see these properties continue to control a competitive share of the local casino market,” he said.
Other casinos will see a slight decline for the rest of the year because their regular customers are most likely checking out the new kids on the Boardwalk.
“We can expect to see some declines in the market share of Atlantic City’s other casino operators, simply due to their regular customers choosing to sample the new offerings. This ‘novelty’ effect will likely persist through the year,” Pandit said.
Pandit: To survive, casinos need to convert novelty into loyalty
Based on Pandit’s predictions, all nine casinos should have plenty of business to finish out the year even if there are small declines in market share.
Revenue-wise, six of the nine casinos saw decreases in casino win of around $23 million. Hard Rock Atlantic City and Ocean Resort brought in $48 million, leaving around $25 million of revenue that the two casinos created.
This is a good sign because it indicates that the two properties were able to bring in new customers, whether it be because they offer something unique or because of the sheer novelty of the dual opening in June.
Either way, Pandit said, of primary importance is that the city’s other casinos strive to capture new customer segments, too, in order to stay competitive.
“There is little doubt that the industry experienced this ‘boost’ [year-over-year] in part due to the novelty of the two new properties,” Pandit said. “This effect will likely persist in the short term, but in the long term, this could become more complicated. The future success of the new properties, and the city as a whole, relies on the industry’s ability to grow the market. In short, to convert novelty into loyalty.”