Atlantic City casinos were less profitable in 2023, even with online help
ATLANTIC CITY, N,J. — Atlantic City’s casinos were less profitable in 2023 than a year earlier, even with help from the state’s booming online gambling market.
Figures released Monday by the New Jersey Division of Gaming Enforcement show that the nine casinos collectively reported gross operating profits of $744.7 million in 2023, down 1.6% from 2022. As two internet entities that affiliated with several of the casinos are included, the decline in profitability was 4.1% with a profit of $780 million.
By 2023, all nine casinos were profitable, but only three saw their profitability increase.
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 numbers “suggest that New Jersey’s casinos are becoming more expensive to operate, and customer spending may not be keeping pace,” said Jane Bokunewicz, director of Stockton University’s Lloyd Levenson Institute, which monitors the Atlantic gambling market. City studies.
“The same forces that could tighten visitors’ wallets – inflation, higher consumer prices – are also forcing operators to dig deeper into their pockets,” she said.
Bokunewicz said higher operating costs, including higher wages and more expensive goods, combined with higher spending on customer acquisition and retention, including free games, rooms, meals and drinks for customers, have not been offset by as significant an increase in consumer spending as the industry had hoped for.
The statistics are sure to be used in the ongoing battle over whether smoking should continue to be allowed in Atlantic City’s casinos. A group of casino workers who have been pressing state lawmakers for more than three years to pass a bill that would eliminate a provision of New Jersey’s indoor smoking law that exempts casinos recently tried a new tactic.
Last week, workers and the United Auto Workers Union, which represents workers at three casinos, filed a lawsuit to overturn the law.
The casinos say ending smoking will put them at a competitive disadvantage against casinos in neighboring countries, costing revenue and jobs.
But employees cite a study of the experiences of casinos in several states that ban smoking and outperform competitors that do 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 companies, Caesars Interactive Entertainment NJ earned $23.6 million, down nearly 28%, and Resorts Digital earned $12.2 million, down 20.5%.
And only four of the nine casinos – Borgata, Hard Rock, Ocean and Tropicana – had higher profits in 2023 than in 2019, before the COVID19 pandemic hit.
The casinos also operate under a contract signed in 2022 that provided employees with significant pay increases.
The nine casino hotels had an occupancy rate of 73% in 2023, a decrease of 0.4% compared to a year earlier. Hard Rock had the highest average occupancy rate at 88.8%, while Golden Nugget had the lowest at 53.8%.
The average room in an Atlantic City casino hotel cost $180.67 last year. Golden Nugget had the lowest average rate at $123.31, while Ocean had the highest at $270.31.
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