Atlantic City Casinos Experience Drop In Profit In Second QuarterThe Drop In Profit Comes Amid 14-Month Streak Of Revenue Increase |
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Of the nine casinos in Atlantic City, eight of them experienced a drop in profits for the second quarter of 2019.
According to numbers released from the New Jersey Division of Gaming Enforcement, casino profits fell 6.8 percent in the second quarter, compared to the same time frame from 2018. Between April-June, the nine casinos reported $159.3 million in profit, which is about an $11.5 million drop year-over-year.
Borgata was the only casino in the city who reported an increase in profit for the quarter. It experienced a 4.7 percent increase with $55.4 million over the three-month period.
The drop in profits come at the same time as the region is experiencing a 14-month streak of double-digit percentage increase in revenue. The increase in revenue clearly isn’t leading to an increase in profit, which might be a signal that the casino market has hit its maximum occupancy in Atlantic City.
Net revenue, however, was up 18.2 percent year-over-year for the second quarter. According to a report from the Press of Atlantic City, net revenue is calculated by taking the gaming revenue, subtracting all promotional allowances, and adding all of the non-gaming revenue such as food and beverage sales.
It was the fifth consecutive quarter of growth for Atlantic City casino net revenue.
July was the first month out of the 14-month revenue streak that the numbers made an apples-to-apples comparison of two markets with nine casinos now that Hard Rock Atlantic City and Ocean Casino Resort have been in business for more than a full year.
James Plousis, chairman of the Casino Control Commission, feels that with the change in the number of casinos in the market, next quarter will be the period where we will be able to draw a real conclusion on where the market is headed.
“Results from individual casinos show the market was still adjusting to the new level of competition through the second quarter,” said Plousis in a statement. “Next quarter will provide an opportunity to compare year-over-year results in Atlantic City’s nine-casino market.”
Through the first six months of 2019, gross operating profits are down 16.8 percent compared to the first half of 2018. So far in 2019, casinos have reported $245 million versus $294.5 million through the first six months of 2018.
Ocean Casino Resort actually posted a loss for the quarter. One of the city’s newest properties posted a $1.2 million loss in the second quarter and is operating at a loss of $12.75 million on the year.
Hard Rock, the other new casino in Atlantic City, made $11.3 million in the second quarter. It was smack in the middle of the pack, ranking as the fifth highest-profiting casino in the state. Only Borgata, Harrah’s, Tropicana and Caesars reported higher profits.
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