Anyway You Slice It, Atlantic City Casinos Are Still Fighting For A Larger Piece Of A Bigger Pie

Hard Rock Atlantic City and Ocean Casino Resort celebrated their respective one-year anniversaries in late June.

And as a result, July was the first time an accurate year-over-year comparison of a nine-casino market could be done.

Before the two uptown casinos opened, speculation often lingered on how nine casinos would survive in Atlantic City. Are the two new additions helping or hurting the market? Which casinos are growing and which have taken a hit, if at all?

Rummy Pandit, executive director for Stockton University’s Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism, said monthly gross revenues and quarterly net revenues show “a positive growth trend for the city as a whole.”

“Also, the new properties aren’t the only ones seeing revenue increases indicating the pie is continuing to grow and the slices are getting larger,” said Pandit.

If we look at the latest numbers released by the New Jersey Division of Gaming Enforcement, total gaming revenue came at $323,324,385 — that’s nearly an 8% increase from the same period last year.

But a closer look shows that there are winners, some losers, and a market that is still figuring itself out.

Borgata still the undisputed king

The MGM-owned Borgata seems to be one property that isn’t feeling the impact. One year later, the Marina District property continues to be the one the other Atlantic City casinos are chasing.

In July alone, Borgata reported $87,994,493 in total gaming revenue. It’s one of those numbers that just pops out on the spreadsheet. As it should. It’s the best month ever in the casino’s 16-year history.

In fact, Borgata saw growth across the board:

  • Total gaming revenue increased by 14.8%.
  • Online casino revenue came in at $6,365,511, a 29.1% increase.
  • Sports betting revenue was $859,478, of which $696,392 came from retail.

The question is how much foot traffic will the recently opened Moneyline Bar & Book bring to Borgata during NFL and college football betting?

Or does it matter? After all, Borgata has been the king of the market since 2006, long before sports betting in New Jersey joined the party.

AC casinos July 2019 vs July 2018 revenue

The new kids on the Boardwalk: Hard Rock + Ocean

On the flip side are the newcomers, both of which are making names for themselves.

Hard Rock is coming off a very strong July with $38,709,141 in land-based casino revenue — good enough for second in the market behind Borgata. That number marks a 19.5% increase from the same period last year.

The property is second in total gaming revenue (including NJ online gambling) with $40,766,575, a 24.6% increase.

How has Hard Rock moved the needle so far? Well, besides being an internationally recognized brand, Hard Rock has an A-list entertainment lineup that draws foot traffic to the property.

At the same time, Hard Rock AC still has room to grow, namely at its sportsbook. The uptown property generated just $606,654 in NJ sports betting revenue.

But up until last week, Hard Rock only had its self-branded sportsbook skin up and running. July does not include last week’s soft launch of sports betting giant Bet365 NJ.

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Ocean Casino feeling those good vibrations

Following a bad start and an ownership change, Ocean continues to reap the benefits of the prime summer season.

The property reported total gaming revenue from casino, sports, and online of $20,170,694 for July — an 18% increase from the same period last year.

The majority of that number is from the casino floor. In the NJ online casino market, Ocean is still a ways behind its competition. It only has the one skin to its name. In comparison, Borgata has nine total sites using five brands under its belt.

Plus, for now, all sports wagering is via a partnership with William Hill NJ (now Caesars NJ).

The key will be building on the wave of successes it has had of late.

Golden Nugget may be small, but …

Many would likely assume that Golden Nugget and Resorts would be getting hit the hardest by the bigger and swankier properties.

But if we are talking total gaming revenue, this is far from the case. And they both have the success of online gambling to thank for it.

To really understand Golden Nugget’s power, we need to look at year-to-date totals.

Golden Nugget alone, year to date, has earned $93,536,687 just in online casino winnings. Besides the self-branded app, Betfair NJ (now FanDuel NJ), PlaySugarHouse Casino, and BetAmerica all operate under the license. And all of them have an online sportsbook attached.

Added to that is Betfair’s connection to the No. 1 sportsbook app in the state: FanDuel Sportsbook. That link gives Betfair a big boost in terms of cross-selling, which in turn helps Golden Nugget’s online revenue totals.

Cross-selling between the online sites certainly has helped. But what makes the number stand out even more is that slots and table game winnings at the AC property come in at $116,000,049 year to date.

Besides the two numbers being very close to one another, the 13% drop from the casino floor is wiped out by the 60.5% increase from online.

Combine it all together and Golden Nugget’s total number is $210,076,239. That’s currently good enough for second-best in the market and a 9.6% increase.

Tropicana, although down 9.8% for the year, is currently third overall with $203,004,316.

Resorts Digital powering Resorts Atlantic City

Look at Resorts simply from a land-based perspective, and Atlantic City’s oldest property is flat.

The $18,160,182 in total gaming revenue is the lowest among all operators. This includes minimal July earnings from the DraftKings Sportsbook at Resorts.

But like Golden Nugget, Resorts makes up serious ground via its online casino and sports betting partnerships.

They fall under the Resorts Digital umbrella. On the online casino side, the upward trend continues to the tune of $6,868,812 in July — a 74.3% increase. (PokerStars Casino, DraftKings Casino, Resorts Online Casino, and Mohegan Sun Casino all fall under the license.)

In other words, Resorts, along with Golden Nugget, contributed big time to July’s $39,315,731 Internet gaming win — a new all-time high.

The previous record of $39,134,380 was set back in March.

On the sports betting side, the license holder is No. 2 in the market thanks to the success of DraftKings. FanDuel Sportsbook is still on top, but $4,266,540 is not too shabby.

Plus BetStars NJ will be transitioning to Fox Bet just in time for football season. Expect to see the online numbers continue to climb at Resorts.

The Caesars question

But what does the future hold for business at the center of the Boardwalk and Caesars Entertainment as a whole?

Business at Bally’s and Caesars is not as strong. The latter saw a 15.2% drop in total gaming revenue for the month — the biggest loss among the nine operators.

Bally’s saw a drop of 11.3% in the same category. The sister properties are celebrating their respective 40th anniversaries this year.

But Bally’s is now home to AC’s largest sportsbook (15,228 square feet, to be exact), complete with its own self-serve beer wall. The space had a mid-June soft opening.

The chance for fans to watch games in a Vegas-style setting will draw plenty of foot traffic. But will it equate to customers playing slots and table games?

Sister property Harrah’s Resort currently ranks the fifth year to date in total revenue ($179,423,929).

And the Eldorado factor

The short-term fix at Caesars, however, may be drastically different than the long-term one.

At some point next year, the Caesars and Eldorado Resorts merger is expected to be finalized. The Trop is currently operated by Eldorado.

And although Tropicana reported the fourth-highest total gaming revenue for July ($32,981,858), the number signifies an 11% drop.

Pandit said the three Caesars Entertainment properties are a key piece in the pending merger of the two companies.

“Whether the merger succeeds or not, we can expect significant changes at these properties which should make them more competitive in the Atlantic City market,” he said.

“All four properties have recently made capital investments in their gaming and non-gaming products and are on a path to providing a more distinctive customer experience. Should the merger succeed, all four will have access to a combined Caesars/Eldorado loyalty program.”

So, what is the magic number in Atlantic City?

Unlike the Las Vegas Strip, it’s highly unlikely we will see new casinos rising in AC anytime soon.

But will all nine casinos remain open following the Caesars/Eldorado merger?

The reality is Atlantic City can no longer be viewed as simply a land-based operation. Online casinos are a huge source of revenue up and down the Boardwalk and Marina, giving smaller casinos a lot of power and growing the pie as a whole.

The mobile sports betting market consistently accounts for more than 80% of monthly wagers.

In terms of what it means for projecting AC’s future, Pandit said consumer demand and changes in regional gaming supply may create market conditions that favor a larger or smaller casino market.

“Customer demand is always a moving target,” Pandit said, “and regional gaming expansion, as well as the launch of legal sports betting, contribute to an evolving supply of gaming products in the Atlantic City market.

“In essence, the market is always evolving along with changes in demand and supply.”

About the Author

Bill Gelman

Bill Gelman is a veteran sports writer based just outside of Philadelphia and not too far from the Jersey Shore. Bill spends time in Atlantic City writing about casino openings and expansions, special events and world championship boxing at Boardwalk Hall. He is now adding NJ sports betting and online gambling to the mix.