Operating profit of $135M

Atlantic City's nine casinos see earnings down by 15% in Q1 amid higher wages, ongoing inflation

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Atlantic City casinos' collective gross operating profit has fallen by almost 15% in the first quarter of 2023 when compared to the same period a year ago, according to figures released Monday by the New Jersey Division of Gaming Enforcement.

The nine casinos collectively posted an operating profit of $135.4 million in the first three months of 2023, which is down from the more than $159 million in profits they posted in Q1, 2022. Gross operating profit reflects earnings before interest, taxes, depreciation, and other charges.

James Plousis, Chairman of the New Jersey Casino Control Commission, told Associated Press that casinos are dealing with higher costs this year, including significantly higher wages they agreed to pay workers under a landmark contract reached last summer.

“Compared to the first quarter last year, the casino hotels are employing more people and a progressive labor agreement was reached,” Plousis told the cited source. “These steps are emblematic of an industry that is preparing for growth and success.”

For his part, Mark Giannantonio, president of Resorts Casino and of the Casino Association of New Jersey, also attributed the lower earnings to inflation.

Mark Giannantonio

As for results per casino, Bally's went from a big first-quarter loss of $6.8 million last year to a meager profit of $88,000 in Q1 2023. The Ocean Casino Resort’s profit was up 27.6% to $23.6 million; while Harrah’s saw its profit increase by more than 21% to $19.2 million; and Caesars’ profit was up over 7% to $11.3 million.

Meanwhile, Resorts went from a $527,000 profit in last year’s Q1 to a $284,000 loss this year. The Borgata’s profit was also down, over 50% to $22.8 million. For its part, Hard Rock’s profit was down 17.5% to $22.2 million; and Tropicana was down 15.3% to $16.7 million. Lastly, Golden Nugget had a profit of $4.8 million, down from a $5.6 million profit over the same period in 2022.

Among internet-only entities, Resorts Digital was up nearly 6% to just under $8 million, while Caesars Interactive Entertainment NJ was down 13.2% to $6.8 million.

The Golden Nugget had the lowest-cost average room rental rate in the first quarter, at $113 a night. Meanwhile, Ocean had the highest, at $212. The overall casino hotel occupancy rate for the first quarter was 65.2%, up 2.1% from a year earlier.

The figures come amid ongoing concerns surrounding Atlantic City's in-person gambling winnings. While overall gambling revenue increased by 9.5% year-on-year in April, hitting $462.7%, the figure also includes the share brought in by sports bets and iGaming, which must be shared with partners. When analyzed separately, winnings from on-premises physical casinos fell by 1.6% to $231.4 million.

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