The ongoing slump in Atlantic City's casino businesses ain't a pretty sight.
First-Quarter Earnings for Atlantic City Drop by 15% Compared to Previous Year
The collective dismay is palpable as the operating profit plummeted by a staggering 15% in Q1 of this year compared to the same quarter in 2022. This dampens hopes that the sector has made a full recovery.
The state's Division of Gaming Enforcement confirmed the grim numbers, revealing that the collective operating profit of the nine casinos in New Jersey stood at a mere $135.4 million - significantly less than the $159 million posted last year.
James Plousis, the chairman of the New Jersey Casino Control Commission, shines some light on the numbers. He points to the higher costs that casinos have been grappling with, claiming these costs have been a significant drag on their financials. One of the major reasons for this, as per recent agreements, is the rise in worker wages across various roles, such as beverage servers, porters, bartenders, housekeepers, and more.
Plousis underscores that wages aren't the only issue at play. Casinos are also expanding their workforce, meaning associated costs are on the rise as well. Inflation is another factor, according to Mark Giannantonio, president of the Casino Association of New Jersey.
A mix of challenges
Despite the gloomy picture, some companies have managed to buck the trend. Bally, for instance, reported an operating profit of $88,000 which might seem small, but is a far cry from the $6.8 million loss it experienced in 2022. The Ocean Casino Resort also saw its profit increase by nearly 28% to $23.6 million.
However, it's not all good news. Resorts, for example, saw its profit drop to $284,000, down from $527,000 in 2022. Borgata registered a 50% decline in profit at $22.8 million.
The Golden Nugget saw a slight downtick in profit, sitting at $4.8 million in Q1 2023 compared to $5.6 million in Q1 2022. Caesars Entertainment experienced a contracting profit by 13.2% to $6.8 million. Resorts Digital, however, inched up by 6% to $8 million.
While specific Q1 2023 data is not readily available, it's clear that rising costs, weakened consumer demand due to economic uncertainty, increased competition, and broader economic challenges are likely contributing to the decline in profitability for Atlantic City's casinos. These factors can significantly impact the sector and highlight the need for strategic responses and adaptability in these challenging times.
- The collective operating profit of Atlantic City's casinos is on a downward trend, as seen in the 15% plunge in Q1 of this year compared to the same quarter in 2022.
- James Plousis, the chairman of the New Jersey Casino Control Commission, attributes this decline to the increase in worker wages across various roles, such as beverage servers, porters, bartenders, housekeepers, and more.
- Although some casinos have managed to buck the trend, such as Bally and Ocean Casino Resort, others like Resorts and Borgata have suffered significant profits losses.
- The ongoing slump in Atlantic City's casino businesses is influenced by a mix of challenges, including rising costs, weakened consumer demand due to economic uncertainty, increased competition, and broader economic challenges.
