The COVID-19 pandemic took its toll on nearly every industry in 2020, and Atlantic City casinos were no exception.
But the December — and thus year-end — figures underscored the extent to which online gambling options bolstered the casinos’ bottom lines.
Brick-and-mortar casino revenues — which were zero in April, May, and June — unsurprisingly dropped by 43.7% last year, to $1.5 billion. Still, the industry overall produced more revenue than from any year 2013-17, the period that stands as the nadir in the city’s 43-year-old gaming industry.
How? Online casino gaming revenue doubled to $970.3 million, and sports betting dollars going to casinos grew by one-third to $166.3 million, with more than 90% of that coming from online sources.
That has changed the “slices of the pie” dramatically.
All of the Atlantic City casino gaming revenues from 1978-2012 were from brick-and-mortar dollars. Online casino gaming came aboard in November 2013 but produced only modest numbers in the first several years. Sports betting entered the equation in June 2018 with Borgata and Monmouth Park the first out of the gate.
So by the time the pandemic came along, the state’s casinos were armed with strong alternatives. It meant an overall reduction in revenue of 16.9% in 2020, or less than half of the drop from brick-and-mortar alone.
A new way to slice up this pie
In 2019, traditional casino gaming revenue represented 81.8% of total casino revenue, with 14.6% coming from online casino play and the other 3.6% from sports betting at casinos and their online betting partner apps.
But last year, the brick-and-mortar “slice” dwindled to 57%, with online casino jumping to 36.6% and sports betting claiming a 6.4% share.
Casino executives point out that such a shift has not come without pain. Manpower needs are far less with online gambling, and it also brings business partners into play who get a portion of the proceeds in exchange for running the online casino and sports betting apps.
And when the casinos need to cut thousands of jobs, it depresses the economy of Atlantic County, which indirectly harms other businesses that see a decline in sales with that rise in unemployment. That means some would-be local visitors to casinos are forced to cut back on their visits, leading to additional decline in traditional casino revenue.
Still, casino operators in most states no doubt are envious of what Atlantic City casino operators have been able to salvage financially during this pandemic.
Borgata remains king of the hill
The best indicator of casino financial health for 2020 will be the year’s gross operating profit figures that, after an audit, will be released in May. But for now, we’ll settle for brick-and-mortar gross gaming revenue.
Borgata maintained its “top dog” status last year, with $337.6 million in revenue. But that was a decline of 52.4% — worse than the industry-wide figure of 43.7%.
Hard Rock, which opened in mid-2018 after the former Trump Taj Mahal was renovated, held onto second place at $224.8 million (down 30.6%). Ocean Casino, with an industry-“best” decline of just 14.9% to $183.6 million, jumped from sixth place a year earlier to third in 2020.
That dropped Harrah’s one slot to fourth, at $165.9 million and 46.8% decline. Tropicana also slipped one notch, at $159.6 million and down 47.3%, as did Caesars, at $151.2 million and 44.2%.
Race to (avoid) the bottom
There was a shuffle among Atlantic City’s bottom three earners.
Resorts, the city’s first casino, climbed from eighth to seventh at $99.5 million while experiencing an industry-average revenue decline. Bally’s, which was sold late last year to Twin River — which wound up taking the Bally’s brand name for its company — took in a total of $95.3 million.
That left Golden Nugget dropping from seventh to ninth at $95 million, a decline of 52.2%. But Golden Nugget claimed the top spot in online casino revenue at $318.9 million. Borgata was the other big online player among the casinos, at $208.2 million.
Online poker revenue, meanwhile, nearly doubled in 2020, from $20.9 million to $38.8 million — almost keeping up with the boom in other online casino games such as slots or blackjack.