Atlantic City casino profits up in 3Q

2014-11-26

Reading time 1:50 min

(US).- Atlantic City's casino industry saw its operating profits rise in the third quarter of this year, helped by Internet gambling money and the absence of large losses racked up last year by weaker casinos. The casinos reported a gross operating profit of USD 147.5 M in July, August and September, up 7.2 percent from the same period a year ago. Those numbers include comparisons with four casinos that have since closed, some of whom lost large sums in the summer 2013.

The eight casinos currently operating in Atlantic City posted a gross operating profit of US$ 152.3 million in the third quarter, an increase of 3.4 percent. Gross operating profit reflects earnings before interest, taxes, depreciation and other charges, and is a widely accepted indicator of profitability in the casino industry.

The figures were released a day before the anniversary of internet gambling coming to New Jersey. In the third quarter of last year, the 12 casinos that were operating at the time did not have the US$ 9 million to US$ 10 million a month that online betting has provided.

However,an even bigger factor in the profit increase this summer was the absence of large losses racked up by casinos, including Revel and The Atlantic Club, two of the four Atlantic City casinos that have shut down so far this year. A fifth, the Trump Taj Mahal, is scheduled to close Dec. 12.

In the third quarter of 2013, Revel posted an operating loss of US$ 23.5 million. Revel closed on Sept. 2; because of its shortened operation in the third quarter of this year, its losses were only US$ 2.4 million.

The Atlantic Club posted a US$ 1.7 million operating loss in the third quarter of 2013. It closed on Jan. 13, 2014 and thus did not operate in the third quarter of this year. Resorts Casino Hotel posted the largest increase in gross operating profit at US$ 4.9 million, up nearly 600 percent from the US$ 708,000 that it earned in the third quarter of last year.

The Golden Nugget Atlantic City had an operating profit of US$ 5.6 million, up 165 percent from the US$ 2.1 million it earned in the third quarter of last year.

The Taj Mahal posted the largest decline in operating profit at US$ 5.7 million, down 39 percent from US$ 9.4 million in the third quarter of last year. Trump Plaza, which closed on Sept. 16, posted a quarterly operating loss of US$ 5.6 million.

Bally's, Caesars and Harrah's, the three remaining Atlantic City casinos owned by debt-laden Caesars Entertainment, also saw their operating profits decline in the third quarter. For the first nine months of the year, the eight casinos currently in business posted an operating profit of US$ 319 million, down 1.5 percent from the same period last year.