Casino profits in Atlantic City as local industry becomes saturated
The first quarter saw Atlantic City attract 30% lower revenue
Atlantic City has a problem. Where the gambling industry once thrived, it is finding itself precariously unstable, allowing more venues to come into the city than it probably should have. As a result, the entire casino industry has been suffering and the latest quarter has reinforced the previous downward slides. Casino profits shrunk 30% in the first quarter of the year.
The New Jersey Division of Gaming Enforcement (DGE) released its numbers for the quarter yesterday and the nine brick-and-mortar casinos (plus two online casinos) took in revenue of $704.6 million in the period. This was an increase of 17.6% over the first quarter of last year, but it also represents a gross operating profit decline of $87 million over the same period.
Five of the original Atlantic City casinos reported a decline in profit. Two of them, Bally’s AC and Harrah’s, reported drops of 54.4% and 41.9%, respectively. Both of the properties are owned by Caesars, which has been actively pursuing a sale of some sort and this may have contributed to a reduction in the venues’ attraction.
The numbers are surprising and don’t bode well for the future. Last year, revenue dropped because of inclement weather. This year, in the first quarter, there was no weather issue, so there should have been an increase, in theory, in casino revenue.
Only one property, Resorts Casino Hotel, saw positive gains, while the remaining six that were in operation in the first quarter of last year all saw declines.