Atlantic City’s casinos make it an ideal gaming destination for players from all over the world. They made less profit in Q2 2023 than in Q2 2022. The city’s nine casinos include Ocean Casino and Hard Rock Casino Resort.
The New Jersey Division of Gaming Enforcement (DGE) released Atlantic City’s gaming industry performance report for the second quarter on Tuesday. It showed that the gaming properties’ net gaming revenue between April and June rose to $795.7 million by almost 1 percent.
Nevertheless, their gross operating profits were reduced to $138 million by 20 percent.
The DGE stated that net revenue is the casino revenue that an operator is left with after deducting promotional allowances. It included the profit it makes from beverage and food sales and hotel rooms.
Still, gross operating profits are the earnings that a casino gets before deducting amortization, affiliate fees, depreciation, taxes, and interest. The profits are often used to assess a casino’s profitability in Atlantic City.
The report indicated that the region’s casinos incurred higher costs despite making less profit. This is mainly due to soaring costs of goods as a result of the 2021-2022 high inflation rates. The gaming properties revealed that their labor costs are on the rise as they are struggling to get skilled workers.
How Are the Casinos’ Guest Rooms Fairing?
The nine casinos’ online and land-based gaming operations earned them $1.57 billion in net revenue in H1 2023. This was 1.5 percent higher than their H1 2022 net revenue. Still, the industry’s profits dropped by 18 percent.
Even so, the properties’ 15,518 had a 70 percent guest occupancy in H1 2023. The rate almost stagnated in H1 2022 since the casinos had 418 fewer rooms than they have today. Ocean Casino built 460 new rooms and suites, which it launched in May 2022.
The casinos’ guestrooms have an average nightly rate of $166 in 2023, which is $3 higher than their 2022 rate. But, their land-based operations raked in over $1.35 billion in gaming revenue in H1 2023, which was a 3.5 percent year-over-year increase.
Atlantic City’s gaming market’s size didn’t change in H1 2023 compared to H1 2022. James Plousis, the New Jersey Casino Control Commission Chairman, stated that the casinos are competing for clients. He added that each operator made a profit despite the high labor and operation costs.
Plousis said that the casinos hired 1,000 more employees in the last year. This has greatly increased the region’s and state’s workforce.
Hard Rock Is the Leading Casino
MGM Resorts Borgata Hotel & Casino is the region’s most popular casino due to its high revenue and good reputation. It generated $376.9 million net revenue in H1 2023, which was $114 million higher than Hard Rock’s revenue.
However, Hard Rock’s operations earned it $52.7 million gross operating profit, while Ocean Casino held the second position with a $47.5 million profit.
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