Atlantic City Casinos Down 15% to $134.5 million in Q1 2023
LISTEN TO THIS ARTICLE:The New Jersey Division of Gaming Enforcement has released its Q1 2023 financial results, which showed a nearly 15% decline in Atlantic City's nine casinos' gross operating profit compared with the first quarter of 2022.
The operating casinos in Atlantic City collectively reported an operating profit of $135.4 million in the first quarter of 2023, lower than the $159 million profit they posted in the same period last year.
Looking at the individual key metrics, The Golden Nugget saw a profit of $4.8 million, approximately a 14.29% decrease from $5.6 million recorded in Q1 2022. Resorts had a profit of $284,000, down from a $527,000 profit over the same period last year.
Borgata's profit for the same period last year decreased by 50% to $22.8 million. Hard Rock's profit down by 17.5% to $22.8 million. Tropicana posted a decrease in yield of 15.3% to $16.7 million. In the internet-only category, Caesars Interactive Entertainment NJ witnessed a decline of 13.2%, amounting to $6.8 million.
Some operators in the jurisdiction reported a profit year-on-year, including Bally's with $88,000, up from its $6.8 million loss last year. Ocean Casino Resort's profit increased by 27.6% to $23.6 million; Harrah's increased by more than 21% to $19.2 million. Caesars saw a 7% rise in profit to $11.3 million. Resorts Digital followed closely with a 6% increase to under $8 million.
Inflation; Leading Cause of Diminishing Profits
Industry veterans like James Plousis, the Chairman of the New Jersey Casino Control Commission, and Mark Giannantonio, President of Resorts Casino and of the Casino Association of New Jersey, have attributed the gross operating profit decline recorded by most operators in their Q1 2023 report to inflation and rise of operating costs.
According to Plousis, casinos are facing higher costs in 2023, partly caused by the landmark labor agreement they entered last summer in which they agreed to significantly increase the wages of their workers, including bartenders, porters, housekeepers, beverage servers, and others.
However, Plousis concluded by saying that the labor contract and the increase in the number of people the casino hotels are employing are steps "emblematic of an industry that is preparing for growth and success."
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