Atlantic City Casinos Post $112M Operating Loss in Second Quarter
Posted on: August 25, 2020, 09:45h.
Last updated on: August 25, 2020, 01:42h.
Atlantic City casinos were closed for the duration of the second quarter, and their balance sheets reflect the extraordinary situation caused by COVID-19.
Gross operating profits for the nine casinos plummeted 170 percent April through June, as their brick-and-mortar gaming floors were shut on New Jersey Gov. Phil Murphy’s (D) orders. They collectively lost $112 million during the three-month span.
In 2019, they reported a profit of more than $159 million. Atlantic City was fresh off a strong 2019 year where profits totaled $613 million.
Then the pandemic hit.
Due to the COVID-19 pandemic, Atlantic City casino hotel operations were closed during the entire second quarter of 2020. Internet gaming and online sports wagering operated during the entire second quarter, but sporting event offerings were limited,” the New Jersey Division of Gaming Enforcement (DGE) stated.
The biggest year-over-year percentage loser was Ocean Casino, which saw its profit tumble 85 percent. The Boardwalk resort recorded an operating loss of $11.8 million.
Borgata was the biggest loser in actual revenue. The MGM Resorts property in the Marina District saw its profit go from $55.4 million in Q2 of 2019 to a loss of $40.2 million in Q2 2020.
Murphy allowed casinos to begin reopening ahead of the July 4 holiday weekend but continues to restrict indoor dining, as well as food and beverage service on the gaming floors. Casinos are also constrained to a 25 percent capacity limit.
The sounds of ringing slot machines are back, but Atlantic City remains quiet in terms of customers.
“The best customers for these casinos are also customers at their hotels, customers at their restaurants,” Rutgers University Economics Professor Bruce Mizrach told New Jersey 101.5. “The air conditioning has to be on for all the customers, whether it’s on for 25 percent or 100 percent of capacity.”
New Jersey Casino Control Commission Chair James Plousis celebrated Atlantic City’s casinos for quickly implementing numerous health safety measures that allowed them to reopen.
“The casinos undertook an amazing effort and expense to prepare a safe environment for the return of employees and guests,” Plousis declared.
Online Gaming Surges
Only one casino posted a gross operating profit in the second quarter. Golden Nugget managed to squeak out a $3.1 million win due to it being the market leader in online gambling in New Jersey. For the six months through June, Golden Nugget’s online slots and table games won more than $150.1 million — a 90.9 percent year-over-year surge. Golden Nugget commanded a 35.5 percent market share of internet gambling in the first half of the year.
Four casinos saw their net revenue in the second quarter tumble by more than 99 percent, and three are owned by Caesars Entertainment: Harrah’s (-99.6), Bally’s (-99.4), and Caesars (-99.3).
The year-over-year drops are slightly misleading, as Caesars operates its online gaming through a separate entity named Caesars Interactive Entertainment NJ. The company’s online casino unit won $19 million during the quarter, an 85 percent premium in 2019.
Resorts Digital also experienced a strong three months. The company reported net revenue of $15.7 million, a 78 percent increase.
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