Atlantic City’s nine casinos made $269.2 million in gross operating profit in the third quarter of 2022. The New Jersey Division of Gaming Enforcement (DGE) recently released mixed results about the region’s gaming industry’s performance.
The $269.2 million profit that gaming operators made indicates a 13 percent year-over-year quarterly loss. Yet, it is 12.5 percent more than the profit they made in the third quarter of 2019.
Jane Bokunewicz. Stockton University’s Lloyd D. Levenson Institute of Gaming, Hospitality, and Tourism director explained that there were many headwinds last summer. They included inflation, soaring gas prices, supplies, and staffing shortages.
The director added that increased wages, expenses, and reduced general spending posed a huge financial challenge to Atlantic City casino operators in the summer. She stated this while revealing why the industry’s profits reduced in Q3 2022 compared to Q3 2021.
The Seminole Tribe of Florida owns Hard Rock. The casino made the highest profits in the third quarter as it netted more than $44 million, followed by Tropicana with $41.5 million and Borgata with $40 million.
Gross operating profits represent the operator’s earnings before amortization, depreciation, affiliate charges, interest taxes, and miscellaneous items that every casino’s license income statement reflects. Atlantic City’s gaming sector largely uses it to measure a gaming company’s profitability.
Improved Performance in 2022 Unlike in 2019
The DGE Q3 profit report reveals the challenges that entrepreneurs face as they combat high inflation rates. Net revenue includes beverage and food receipts, gaming revenue, entertainment income, and room sales. It increased by 1.3 percent to $980.1 million in the third quarter.
Even so, operators’ gross profits declined in the past year. Yet, casinos have significantly improved their performance compared to during the pre-pandemic period. Local casinos generated more than $2.5 billion in net revenue between January and September, making over $608.5 million in profits.
The casinos generated $2.4 billion in net revenue in 2019’s first nine months and made $484.5 million in profits. Gaming has contributed a huge percentage of casinos’ profit and net revenue as they have seen more action this year.
Reports show that they generated $2.35 billion in gross gaming revenue (GGR) from brick-and-mortar. This is almost $101 million higher than what land-based gaming earned them in 2019’s first ten months.
Decreased Visitation
Many casino operators are streamlining some operations hence making more profits. Yet, the DGE’s quarterly report indicated that fewer people are visiting Atlantic City compared to before the Coronavirus pandemic.
Atlantic City casinos‘ 15,544 guestrooms had an 86.7 percent occupancy in Q3 2022 compared to a 91 percent occupancy in Q3 2019. But casino rooms had high average rates of almost $217 per night, unlike their 2019’s average rate of $161, thus having a $56 increase.
The casinos had a 76.2 percent occupancy from January to September and had 3,000,480 room nights in the same period. Yet, they had an 81.2 percent occupancy rate in 2019 in the first three quarters and had 3,299,056 room nights.
Besides, the operators are making more profits per room as a casino hotel room cost $184.71 on average between January and September 2022 and $145.51 during the same period in 2019.
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