Casino profits fell by more than 15 percent in Atlantic City in 2018, a year in which the downsized market reopened two shuttered gambling halls, according to the figures released Monday.
The result was a decline in gross operating profit of 15.4 percent for the year to $ 582 million.
Five of Atlantic City's 12 casinos closed between 2014 and 2016, and the market seemed to have stabilized at a smaller level with less competition. But the reopening in June of Revel as Ocean Resort Casino, and Trump Taj Mahal as Hard Rock, put two new competitors back in the mix.
Of the seven casinos that had been operating at the beginning of last year, five
Only Tropicana and Golden Nugget increased operating profit last year.
When the plans to reopen the two casinos were discovered last year, there was concern in some areas that the newly downsized market, which had recovered its foot at a smaller level, could fight to absorb the new competition, which resulted in a smaller piece of cake for everyone.
James Plousis, president of the New Jersey Casino Control Commission, acknowledged that "profit margins were tighter."
"But the resort added thousands of jobs and many exciting new facilities, which makes us good for continued growth," he added. 9002] Gross operating profit reflects earnings before interest, taxes, depreciation and other expenses, and is a widely accepted measure of profitability in the Atlantic City casino industry.
The Golden Nugget had the largest increase in operating profit for the year, up 1
Borgata reported the biggest decline in profits, down 18.8 percent to $ 206 million, a figure that was roughly twice the size of its closest competitor. Caesars was down 15.4 percent to $ 79.6 million; Harrah's was down 6.5 percent to $ 109.3 million; Bally's was down 5.7 percent to $ 40.1 million, and Resorts was down 2.7 percent to $ 22.5 million.
Among digital devices, Resorts Digital was down 75 percent to $ 3.6 million, and Caesars Interactive-NJ was 13.3 percent to $ 9.3 million.
The two new casinos each reported a gross operating profit for the year in 2018. Ocean Resort lost $ 17.8 million, while Hard Rock lost $ 9.1 million.
"The launch of a new property and purchase of new customers is always expensive, but we are very pleased with the volume and momentum of 2019," said hardrock president Joe Lupo of The Associated Press.
In the fourth quarter of last year, Atlantic City's casinos showed a collective decline in gross operating profit of 41.1 percent to $ 75.1 million.
Atlantic City's casino hotel was over 80 percent full in 2018. Resorts had the highest occupancy rate of 86 percent; The Golden Nugget was lowest at 74 percent.
Borgata had the most expensive average room price of $ 179.64, while the Golden Nugget had the cheapest price of $ 83.98.