Casino Profits Down in Atlantic City
The gambling industry in Atlantic City is facing challenges as two more land-based casinos are scheduled to reopen in June under new ownership.
According to statistics published by the city’s gambling regulators on Tuesday, the industry’s overall operating revenue in the first 3 months of 2018 came up to $123.6 million. This is 11.7% less than what the industry made in the first quarter of 2017.
The occupancy rate in the casino hotels for the same period was 77.9%, which is a 3.2% less than the occupancy rate for the same period in 2017. As for sales from 3rd party businesses, there was a 4% decrease, which brought the figure down to $39.2 million.
On the whole, the casinos earned a net revenue that was 3.2% lower ($599.2 million) compared to previous year’s net revenue for the same period. A major contributing factor here was less gambling dollars.
As for combined revenue i.e. online and land-based revenue, the industry raked in around $809.3 million in the first quarter. This was 4% lower than the overall earnings for Q1 of 2017 ($843.5 million). Overall revenue earned by the land-based casinos was $716.7 million; a reduction of 6.1%. Online gaming generated $92.5 million; an increase of 15.5% compared to 2017.
But, it wasn’t all bad news. According to Rummy Pandit, Executive Director of the Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism at Stockton University, the hotel numbers were a sign of hope. Pandit found that the average rate per occupied room had gone up significantly compared to the same period in 2017.
In 2017, the rate was around $103.42. The current rate stat $121.47. Other than that, Pandit also pointed out to the revenue per available room as a good sign. The figure for revenue per room in 2017 was $84. However, in 2018, it increased to $94.
Pandit believes that these are generally positive indicators of the market’s strength and stability. He stated that the figures were evidence of how the market was willing to pay more at certain periods.
A Worse Possibility
Things could have been much worse if the revenue had been split between nine casinos instead of the current 7. However, this could very well be the case in the second quarter after Revel and the Trump Taj Mahal reopen as Ocean Resort Casino and Hard Rock Atlantic City, respectively.