Atlantic City Casino Profits Down $89M in Third Quarter, Borgata Bears Brunt of Losses
Posted on: November 23, 2020, 02:04h.
Last updated on: November 23, 2020, 03:31h.
Atlantic City’s nine casino operators reported gross operating profit of $150.5 million in the third quarter, a 37 percent year-over-year decline.
The standard metric of profitability, which represents earnings before interest, taxes, depreciation, and other expenses, shows the three-month period was yet another trying time for the Atlantic City gaming industry.
Net revenue was down 32 percent to $629.3 million — a decrease of $300 million. Profits were down $89 million from the same quarter in 2019.
All nine casinos were profitable during the pandemic-stricken quarter. However, only Ocean Casino Resort posted a year-over-year increase, the Boardwalk property seeing its profits jump from $10.2 million to $24.4 million.
The nine casinos reported a loss of $112 million in the second quarter.
Borgata Decision Costly
New Jersey Gov. Phil Murphy (D) permitted Atlantic City’s nine casinos to reopen ahead of the July 4 holiday. He did so under strict COVID-19 regulations, including gaming floors being limited to 25 percent occupancy.
Just days before casinos were set to reopen, Murphy put the brakes on allowing indoor dining to resume. That decision prompted MGM Resorts to keep Borgata shuttered, the Marina District property saying the ban on food and beverage service inside wouldn’t allow it to provide the guest experience its patrons expect.
After 132 days of being closed, Borgata reopened its doors on July 26. The delay in welcoming back guests and overnight visitors resulted in the casino being the biggest loser in terms of profits in Q3.
Borgata reported a gross operating profit of just $2.3 million from July through September. That’s down 96.6 percent, or $67.5 million.
Casino — Q3 Profit — Variance (Loss)
- Ocean — $24.4M — 139 percent
- Hard Rock — $20.9M — (14 percent)
- Harrah’s — $19.3M — (42 percent)
- Tropicana — $18.2M – (44 percent)
- Caesars — $17.5M — (25 percent)
- Golden Nugget — $16M — (11 percent)
- Bally’s — $13M — (8 percent)
- Resorts — $7.8M — (17 percent)
- Borgata — $2.3M — (97 percent)
Jobs are a major casualty of reduced profits. Atlantic City casinos are employing 4,782 fewer people today than they were at this time last year. Borgata has slashed the most workers at 2,359 and counting.
Q4 isn’t shaping up to be much better for the gaming industry. As of November 12, Atlantic City casinos are prohibited from serving any food or beverage inside during the hours of 10 pm and 5 am daily.
Hotels Occupancy Down
Land-based casino win through September is down 50 percent. Some of the losses are being made up online. When internet gambling and sports betting (both mobile and in-person) are included, the total gross gaming revenue for the nine casino operators is 26.7 percent lower.
Along with the large reductions in brick-and-mortar gambling, the casino resorts are struggling to keep their hotel rooms occupied. In quarter three, Atlantic City’s casinos reported an overall occupancy rate of 73 percent on an average nightly rate of $159. In Q3 2019, the industry had 91 percent of their rooms occupied at a nightly rate of $161.
As of the end of September, there are 15,105 available casino hotel rooms.
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