The nine casinos in Atlantic City have had a poor week. Following the report from the New Jersey Division of Gaming Enforcement (DGE), the state’s casino regulator and industry overseer, which indicated on Tuesday that in-person gaming revenue decreased by 8.5% in October, the DGE stated on Friday that gross operating profits for the nine properties along the shore collectively fell during the third quarter. 

Net revenue, which includes earnings from gaming, hotel accommodations, food and drink, and entertainment, decreased by 2.5% to just above $925 million in the months of July, August, and September. Increased expenses due to inflation combined with lower revenue caused gross operating profits to decline by 13.8% to roughly $236.6 million. 

Gross profits indicate earnings prior to interest, taxes, depreciation, amortization, affiliate expenses, and various other items as shown on the income statement of each casino licensee. According to the DGE, it is a commonly recognized indicator of profitability in the Atlantic City gaming industry. 

Among the nine casinos, only two indicated improved bottom lines in Q3. Hard Rock's earnings of $45.4 million saw a 2.4% increase compared to the previous year, while Caesars' $23.5 million operating profit indicated an 11.2% rise. 

The remaining casinos experienced a drop in profits, falling from 10.9% at Bally’s to a severe 43.8% at Golden Nugget. 

Hotel Prices Plunge 

In spite of the operational challenges, all nine casinos stayed profitable through the first three quarters. Net revenue remained unchanged at $2.54 billion, whereas profits fell 9% to $576.6 million.

"For the third consecutive year, Atlantic City’s net revenue exceeded $2.5 billion in the first nine months of the calendar. Every casino was profitable in both the third quarter and year-to-date,” said James Plousis, chair of the New Jersey Casino Control Commission, which oversees the DGE.

Plousis, nevertheless, admitted that earnings keep declining.

“At the same time, pressure from continuing high costs can be seen in lower profits compared to the same period last year,” Plousis added.

A decline in visitors to Atlantic City resulted in decreased room income for the casinos. 

The resorts indicated an 84.1% occupancy rate, reflecting a 1.5% decline from the same quarter of the previous year. The rooms sold for much lower prices, as the average nightly rate in Q3 of 2024 was $201, which is $17, or nearly 8% less than the $218 rate in Q3 of 2023. 

Ocean had the top rate at $336. Golden Nugget provided the most affordable rooms at $125. 

Desafíos de CA 

Atlantic City's gambling sector encounters numerous persistent difficulties. They encompass heightened local gaming rivalry, inflationary pressures, elevated labor expenses due to a workforce shortage, rising general costs for products and third-party services, and a change in consumer tastes following the COVID-19 pandemic. 

Although in-person casino revenue over the past 10 months fell by 1.6% to $2.36 billion, resulting in a decrease of over $38.7 million, online casino revenue increased by nearly 24% to $1.94 billion. iGaming platforms generated approximately $373.3 million more than during the same 10-month period last year. 

Wagering on sports is also on the rise. Garden State sportsbooks generated more than $912.8 million from January to October 2024, showing a 14% rise, or more than $111.5 million. 

Casinos in Atlantic City distribute a significant portion of their iGaming and sports betting earnings with their external partners such as DraftKings, FanDuel, BetMGM, and Caesars Sportsbook.