The latest quarterly results for the Atlantic City casino industry, which were released on Friday, were a milestone of sorts.
That’s because these were the first figures for the nine casinos that could be compared with a matching set of quarterly figures for nine casinos in 2018.
And with Hard Rock and Ocean Casino Resort now having been open for more than a year, the verdicts are in from the New Jersey Division of Gaming Enforcement, and a big winner is … Hard Rock.
While Borgata, as always, claimed the top spot in net revenue ($234.5 mm) for the three-month period, Hard Rock landed in second place at $128.4 mm, comfortably ahead of Harrah’s and Tropicana, each of which was a couple of ticks over $100 mm.
Of course, many in the industry are more interested in gross operating profits, and Borgata — at $69.9 mm — also won this category handily for July/August/September of 2019. Here Harrah’s ($33 mm) and Tropicana ($32.4 mm) leapfrogged Hard Rock ($24.4 mm), as Hard Rock reported higher expense totals.
Bringing up the rear in both categories was Resorts — Atlantic City’s first casino, opening in 1978 — with just $49.6 mm in net revenues and $9.3 mm in gross profits.
The quarterly figures for profits for the city are the best since the summer of 2017.
2019 by the numbers
We now have nine months of data in 2019, and here Hard Rock and those pesky expenses leave the property not faring as well in that time span. In fact, Hard Rock is a modest seventh in 2019 in gross profits at $29.5 mm — all but $5.1 mm of that coming in that strong third quarter.
Fellow newcomer Ocean is the only “loser” this year, with a loss of $2.5 mm.
As another example of the power of Borgata, which opened in 2003, its $165 mm in gross profits this year is more than one-third of entire industry’s $484.6 mm.
One disappointing note: By this point in 2018, total Atlantic City casino gross profits were just over $500 mm, for a decline of 4.5% in 2019. Borgata — barely — is the only casino to boost its profits this year.
That’s in spite of a double-digit increase in net revenues — just another reminder that the addition of two new casino rivals appears to be cutting into almost all the others’ bottom lines.
Hotel rates and fine print
The industry’s hotel room occupancy rate climbed to a strong 90.8% in the busy quarter, compared to 88.2% for the same period in 2018.
Ocean Casino stands out in these listings. Its 1,399 rooms were an industry-high 99.6% occupied, while achieving the highest average rate per occupied room: $219.01.
Borgata, which has almost twice as many rooms, was a big winner in volume at a 91% occupancy rate and a robust $184.77 average rate. Golden Nugget, with a mere 717 rooms, had the lowest average rate at just $90.25.
Net revenue, according to DGE, reflects casino revenue (minus all promotional allowances) plus rooms revenue, food and beverage revenue, and other revenue as reflected on each casino licensees’ income statement.
Gross operating profit reflects earnings before interest, taxes, depreciation, amortization, charges from affiliates, and other miscellaneous items as reflected on each casino licensees’ income statement.
Photo by Racheal Grazias / Shutterstock.com
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