Atlantic City Casinos Profits Slump in Q1 Of 2024
Atlantic City Casinos Profits Slump in Q1 Of 2024
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According to the figures released by the New Jersey Casino Control Commission, the nine casinos in Atlantic City posted a collective gross operating profit of $140.4 million in the first three months of 2024. This represents a 9.6% decline from the same period in 2023. When including internet-only entities, the collective profit dropped to $155.4 million, an 8.7% decrease year-over-year.
Gross operating profit, a widely accepted measure of profitability in the Atlantic City gambling industry, reflects earnings before interest, taxes, depreciation, and other charges. The significant drop in this metric across the board suggests that casino operators are facing a range of challenges that are impacting their bottom line.
Industry experts have identified several key factors contributing to the decline in Atlantic City casino profits during the first quarter of 2024:
Jane Bokunewicz, director of the Lloyd Levenson Institute at Stockton University, pointed to “an increase in the cost of doing business, inflation, and a potential shift in revenue mix to operations like lodging and food and beverage that traditionally have narrower profit margins.” This suggests that casino operators are grappling with rising expenses, which are cutting into their overall profitability.
James Plousis, chairman of the New Jersey Casino Control Commission, echoed Bokunewicz’s observations, citing labor contracts signed a few years ago that provided significantly higher wages to casino workers. This, coupled with the increased cost of goods and services that casinos must purchase, has put significant pressure on their financial performance.
The shift in revenue mix towards operations like lodging and food and beverage, which typically have narrower profit margins compared to gambling, has also contributed to the decline in overall casino profits. This suggests that Atlantic City’s casinos are diversifying their offerings to cater to changing consumer preferences, but the transition may be impacting their profitability in the short term.
While the majority of Atlantic City’s casinos experienced a decline in profits during the first quarter of 2024, a few operators managed to buck the trend.
Profitable Casinos
Two casinos stood out with increased gross operating profits:
These casinos’ ability to maintain or even grow their profitability in a challenging market environment suggests that they may have implemented effective strategies to manage costs and optimize their operations.
Struggling Casinos
On the other hand, several casinos experienced significant declines in their gross operating profits:
These casinos’ struggles suggest that they may be facing more acute challenges in adapting to the changing market conditions and managing their costs effectively.
The report from the New Jersey Casino Control Commission also included data on the performance of internet-only gambling entities. Among these, Caesars Interactive Entertainment NJ saw a 5.9% increase in gross operating profit to $7.2 million, while Resorts Digital experienced a 3.2% decline to $7.7 million.
