Atlantic City's casinos saw their gross operating profits fall by more than 65% in the first quarter of this year, according to figures released Friday.
The statistics cover only the first two weeks of casino closures due to the coronavirus outbreak; second-quarter earnings are sure to be worse because the casinos have been shut all of April and, so far, May, with no reopening date scheduled.
The figures from the New Jersey Division of Gaming Enforcement show the nine casinos collectively posted gross operating profits of $29.6 million in the first three months of this year, down from $85.6 million in the same period last year.
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The big decline is “not surprising, given that most casinos continued to pay employees for two weeks after the shutdown,” said Jane Bokunewicz, coordinator of a gambling studies institute at Stockton University outside Atlantic City. “With only internet gaming and a small amount of sports betting revenue to offset payroll expenses, a significant decrease was inevitable.”
Three casinos swung from a first quarter profit last year to a first quarter loss this year. Bally's went from a $2.8 million profit in 2019 to a loss of over $8 million this year; Caesars went from a $10.8 million profit to a $593,000 loss, and Resorts went from a $3 million profit to a $3.4 million loss.
Harrah's saw its profit decline from $16.5 million last year to $2.9 million this year; Tropicana's profit fell from $16.5 million to $7.1 million, and the Borgata fell from $39.7 million to $22.6 million. The Golden Nugget's profits declined from $9.2 million to almost $7.3 million.
Hard Rock showed an operating loss in both periods but improved its performance this year, posting an operating loss of $4.2 million in the first quarter this year, compared with a loss of $6.1 million last year.
The same dynamic held true for the Ocean Casino Resort, which had an operating loss of $574,000 in the first quarter this year compared with its loss of $11.5 million in the same period last year.
Gross operating profit reflects earnings before interest, taxes, depreciation and other expenses, and is a widely accepted measure of profitability in the Atlantic City gambling industry.
Gov. Phil Murphy ordered the casinos closed on March 16, affecting the last two weeks of the quarterly earnings reporting period. But that period included what might have been a prosperous period for the casinos, particularly their sports betting operations.
The NCAA college basketball championship tournament was just about to get underway. But it, like virtually all major sporting events, was canceled due to the virus outbreak.
Casinos have continued to take in money through internet gambling, and, on a much smaller scale, sports betting, with obscure events like Belarussian soccer or Russian pingpong providing betting options.
Two internet-only entities saw their operating profits increase during the quarter. Caesars Interactive-NJ saw a $3.7 million profit, up 36.5% from last year, and Resorts Digital had an operating profit of $2.6 million, up 45% from last year.
The casinos' collective net revenue decreased by 14.5% to $595.7 million for the first quarter of this year.
Hotel occupancy was 68.1%, which is 4.5% lower than the first quarter of last year. The Borgata had the highest average room rate at $175.76, while Resorts had the lowest at $92.92.