The New Jersey Division of Gaming Enforcement (NJDGE) released the New Jersey casino industry’s third-quarter report card this week.
Like most of these reports, the news was mixed.
The third quarter includes the months of July, August and September. The report marks the first full quarterly report that reflects the opening of Hard Rock Atlantic City and Ocean Resort Casino, which came online at the end of June.
Atlantic City casinos’ gross operating profits were $213.7 million for the quarter. The number represents a 15.3 percent decrease when compared to the third quarter of 2017.
James Plousis, chairman of the state Casino Control Commission, commented on the industry to the Press of Atlantic City.
“Industry profits were down in light of the new competition that entered the market. On a positive note, compared to last year, over 6,300 more people were working in the industry, and there were nearly 5,400 more full-time jobs.”
A breakdown by Atlantic City casino
In addition to Hard Rock and Ocean Resort, the report includes seven Atlantic City casinos:
Plus, the report includes two online-only entries. Caesars Interactive NJ and Resorts Digital report their online gaming revenue separately.
The two bright spots in the report are Golden Nugget and Bally’s, both generating year-over-year gains. Golden Nugget’s gross operating profits were up 27.3 percent to $37.8 million. Bally’s had profits of $36.4 million, good for a 6.1 percent increase over last year.
Tropicana, Borgata and Resorts saw the most significant declines. Tropicana, with a change in hotel management, earned $31.8 million. The 31 percent year-over-year decline is the largest decline of the bunch.
Borgata wasn’t far behind though. It fell 22 percent to $63.2 million. Resorts came in at $9.2 million for a 14.7 percent decline.
In the middle of the pack are Harrah’s and Caesars. Harrah’s brought in $35.9 million for a 5.6 percent decrease in gross operating profits. Caesars was only slightly down. It fell 2.5 percent to $28.7 million.
The two newcomers came in at the bottom of the pack. The gross operating profits for Hard Rock was $5.6 million and for Ocean Resort was $2.7 million.
The profits for the online gaming entries were significantly down for the quarter. Resorts Digital earned $2 million for an 83.3 percent decrease compared to last year. Caesars Interactive NJ fell 69.4 percent to $1.1 million.
How the industry is faring for the year
Gross operating profits for Atlantic City casinos for the first nine months of 2018 were $508.7 million. That figure represents a 9.3 percent year-over-year decrease.
During the same period in 2017, the casinos generated $560 million.
Net revenues, on the other hand, were on the rise. The casinos brought in $2.2 billion in net revenues. That number is good for a 6.4 percent increase over last year’s figure of $2 billion.
“Clearly the gaming industry’s growth has been beneficial for Atlantic City, the region and the state,” Plousis said.
Some positive performance indicators
The number of vehicles on the Atlantic City Expressway grew from 5.4 million in 2017 to 5.8 million this year. Officials count cars at the Pleasantville Toll Plaza. This year’s number represents an overall growth of 6.3 percent.
Passengers flying into Atlantic City International Airport are also on the rise posting a 2.8 percent increase.
Two new hotels hitting the market undoubtedly affected the hotel occupancy rate for Atlantic City casinos. The third quarter saw an average occupancy rate of 84.1 percent. During the same period last year, the average rate was 89.2 percent.
Additionally, sales from third-party businesses saw some traction. Sales came in at $162.1 million, good for a 5.5 percent increase compared to the same period last year.
Rummy Pandit, executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism at Stockton University, commented on the hospitality sector.
“Sustained growth in the lodging segment demonstrates the resilience of Atlantic City as it continues its transformation from a gaming-centric market to a multifaceted destination resort on the East Coast.”