Atlantic City Casino 2021 Profit Report Stirs Mixed Analysis

Posted on: April 11, 2022, 07:30h. 

Last updated on: April 13, 2022, 09:20h.

Atlantic City casinos disclosed late last week their full-year 2021 gross operating profits. The numbers gave fodder for an array of opinions regarding the gaming beach town’s future.

Atlantic City casinos profits gaming industry
Atlantic City casinos are seen with beachgoers walking in the foreground. Atlantic City casinos reported profits of $766.8 million in 2021. (Image: The Philadelphia Inquirer)

The New Jersey Division of Gaming Enforcement (DGE) revealed that the nine casinos collectively reported profits of $766.8 million on net revenue of approximately $3 billion. Profits totaled just $117.5 million in 2020 when COVID-19 shuttered the resorts from mid-March through early July.

More importantly, 2021 casino profits easily eclipsed the nearly $594 million that the nine properties achieved in pre-pandemic 2019.

Gross operating profits reflect earnings before interest, taxes, depreciation, amortization, charges from affiliates, and other miscellaneous items. It is a widely-accepted measure of profitability in the Atlantic City gaming industry.

This should help operators as they seek to make up significant reductions in gross operating profit from 2020 and finance the major capital improvement projects currently underway at properties throughout the city,” said Jane Bokunewicz, director of Stockton University’s Lloyd D. Levenson Institute of Gaming, Hospitality, and Tourism.

Eight of the nine casinos were profitable in 2021. The lone exception was Bally’s, amid a major renovation of the Boardwalk property that is expected to cost $100 million.

Borgata Continues Dominance

MGM Resorts operates only one Atlantic City casino, but its Borgata has long been the market’s top performer. The Marina District casino continued that trend in 2021, with nearly $174 million in profits. Tropicana came in a distant second at $118.7 million.

Gross Operating Profit

  • Borgata — $174M
  • Tropicana — $118.7M
  • Hard Rock — $106.9M
  • Harrah’s — $99.5M
  • Ocean — $91.2M
  • Caesars — $62M
  • Golden Nugget — $35.6M
  • Resorts — $27.6M
  • Bally’s — ($13.2)

The rest of the profits were generated by Caesars Interactive ($16.6M), Golden Nugget Online Gaming ($32.9M), and Resorts Digital ($15M).

COVID-19 forced Atlantic City’s casinos into streamlining their operations. By reducing overhead — primarily staff costs through condensed employment — profits increased from 2019 despite fewer guests in town. In 2019, the nine casinos reported that their roughly 15,000 hotel rooms were occupied 72% of the time. Last year, those same rooms were occupied by less than 68% percent. In 2021, there were 719,081 fewer booked casino hotel rooms.

Caution Ahead

Joe Lupo is one of the most powerful individuals in the Atlantic City casino industry. He leads the Casino Association of New Jersey (CANJ) by running Hard Rock. And while eight of the nine properties being profitable less than a year removed from the pandemic is a positive, Lupo isn’t celebrating.

“You take Hard Rock and Ocean out, and the other seven properties are flat since 2019,” Lupo said. “That’s discouraging.”

What is encouraging is that the same nine casinos will pay less property tax this year. State lawmakers and Gov. Phil Murphy (D) recently passed legislation to reduce the casinos’ communal property tax responsibility by $55 million this year alone.

Former New Jersey Senate President Stephen Sweeney (D) sponsored the property tax amendment favoring the casinos prior to his exit after his shocking election upset a political newcomer. He warned as many as four casinos could close without such an affordance.

Perhaps the greatest threat to Atlantic City’s future is the forthcoming arrival of three full-scale casinos with slot machines, table games, and sports betting in the New York City area.