Atlantic City, New Jersey Casinos Are Facing Challenges

It was a challenging 1st Quarter, 2023 for the Atlantic City, New Jersey casinos.

The Atlantic City casinos also have not been able to fully rebound from pre-pandemic realities.

2019 was the last full year prior to the COVID-19 pandemic. The first recorded outbreak is attributed to Wuhan, Hubei, China, in November 2019.

Only four Atlantic City casinos have achieved a higher operating profit for 2022 vs. 2019.

The first American case of COVID-19 was reported on January 20, 2020 and President Donald Trump declared the United States outbreak a public health emergency on January 31, 2020.

The Atlantic City casinos have been battling hard ever since, facing mounting challenges from a variety of fronts.

New York City competition is looming large. The violence and poor local Atlantic City government is also a significant problem.

The New Jersey Division of Gaming Enforcement has long managed the collection and public release of casino data.

For the last full year, Atlantic City’s nine casinos generated a gross operating profit of $731.2 million in 2022. This is down from the $766.8 million profit they made in 2021 … a decline of 4.6 percent.

The biggest hurdle remains the runaway inflation, with operating expenses up approximately 25 percent, which is devastating to the bottom line.

An expensive union contract also hit the 3rd and 4th quarter 2022 operating profit.

The financial challenges are not just a result of trying to grow beyond pre-pandemic levels.

When you look at year 2022 vs. 2021, only two of the 9 Atlantic City casinos achieved a higher operating profit last year vs. the previous year.

In good news, the collective hotel daily occupancy rate was up for 2022 vs. 2021 at 73.4 percent … an increase of 6 percent versus 2021.

Many numbers (bricks and mortar, digital and sports betting) are reported for the Atlantic City hotel and casinos. The gross operating profit number is the beauty contest statistic … but, it is still prior to interest, taxes, depreciation, and other expenses being subtracted.

This is why the Atlantic City casino jurisdiction is fighting hard to keep their 25 percent indoor smoking exemption for now … so as not to face additional competitive disadvantages.

SOURCE: New Jersey Division of Gaming Enforcement (for Atlantic City casino revenue and statistics).