Atlantic City Casino Profits Slide in 2023, Report Adds to Industry Concerns

Although the casinos in Atlantic City saw an increase in net revenue last year, the gain was insufficient to cover greater expenses. Profit drops from year to year resulted from that.

On Monday, the nine casinos in Atlantic City released their full-year operating reports, as disclosed by the New Jersey Division of Gaming Enforcement (DGE). The information covers earnings from food and drink, entertainment, hotel rooms, and casino operations.

The nine physical locations generated $3.23 billion in net revenue, an almost 3% increase. However, higher labor and supplier expenses hurt their bottom lines, resulting in a $744.7 million gross operating profit—a 1.6% decrease from 2022.

Only three of the nine casinos saw increases in profits: Bally's, Ocean Casino Resort, and Borgata, all owned by MGM Resorts.

Borgata saw a 1.3% increase in earnings to $226.1 million, while Ocean saw a 22% gain in revenue to $117.3 million. Bally's profit increased dramatically last year, rising from a $1.9 million loss in 2022 to a $11.1 million profit following a significant renovation of the Boardwalk resort.

The six other casinos saw decreases in profits from the previous year that ranged from 2% at Hard Rock to 55% at Resorts. All the casinos were lucrative, nevertheless. 

The three casinos owned by Caesars Entertainment—Caesars, Harrah's, and Tropicana—and Resorts saw somewhat larger earnings since those businesses disclosed their revenue from online sports betting and iGaming through other organizations.

The Virtuous 

Despite the declines in profits, James Plousis, the chair of the New Jersey Casino Control Commission, which is in charge of the DGE, stated that 2023 was still a great year. According to him, the $744.7 million total profit placed second over the previous six years, and 2023 was the third consecutive year that net revenue exceeded $3 billion. 

"Each casino hotel reported positive gross operating profits in 2023 while facing strong competition for customers,” Plousis said in a statement to Casino.org. “The casinos are reinvesting in their properties to add exciting new attractions and appealing accommodations.”

The CCC chair said he toured the casinos during the winter months and was pleased with what he saw.

"Those reinvestments will be key to impressing guests and sustaining positive vibes during the upcoming summer season,” Plousis said.

Enhancements were also noted in the DGE filing concerning casino room stays. With a 3.7% increase from 2022, the nine resorts sold 4,069,412 rooms. Additionally, the average cost increased from $178 to $181.

The Negative

Plousis highlighted a few causes for hope, but other statistics make the business more nervous. The alarms coincide with state lawmakers' ongoing deliberations over whether to outlaw smoking in casinos, a move that the resorts argue would further reduce earnings and probably result in layoffs.

The 2023 profit report, according to Jane Bokunewicz, director of Stockton University's Lloyd D. Levenson Institute of Gaming, Hospitality, and Tourism (LIGHT), shows that operating a casino in Atlantic City has become more costly. 

Furthermore, even while visitor expenses have increased by almost 3% to $3.2 billion, consumer spending isn't keeping up.

Out of the nine casinos, just four—Borgata, Hard Rock, Ocean, and Tropicana—reported increased earnings in 2023 compared to 2019.

Additionally, sales of hotel rooms at casinos are still substantially below pre-pandemic levels. About 4.3 million rooms were reserved by the same nine properties in 2019, however the average price was substantially lower at $142.