Post-COVID woe: Atlantic City casino earns fell 4.6% in '22
Three years after the coronavirus pandemic erupted, Atlantic City’s casinos are collectively struggling to get back to where they were before COVID-19 in terms of profitability
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Your support makes all the difference.Three years after the coronavirus pandemic erupted, Atlantic City's casinos are collectively struggling to get back to where they were before COVID-19 in terms of profitability.
Figures released Monday by the New Jersey Division of Gaming Enforcement show that the city's nine casinos collectively had a gross operating profit of $731.2 million in 2022. That was down 4.6% from the $766.8 million profit they made in 2021.
And only four had an operating profit that was higher than what they reported in 2019, the last full year before the pandemic broke out.
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.
Mark Giannantonio, president of Resorts Casino and the Casino Association of New Jersey, said inflationary pressures took a toll on the casinos' finances last year.
“You have revenue that's not growing fast enough, and couple that with expenses in some categories that are up 20 to 25% or more, and you can see how quickly this can erode profits,” he said.
In the third quarter of last year, a new union contract that paid many casino and hotel workers including housekeepers, drink servers and public area cleaners large raises took effect, averting a threatened strike.
But Giannantonio said the pressure on earnings was not solely due to higher labor costs.
Only two of the nine casinos had higher operating profits in 2022 than in 2021: Hard Rock earned over $128 million, up nearly 20% over the previous year, and Ocean earned $96.2 million, up 5.5%.
Bally's shrunk its operating loss dramatically last year, losing $1.8 million compared to $13.1 million a year earlier.
Borgata had an operating profit of $140.2 million, down 19.4%; Caesars earned $60.4 million, down 2.7%; Golden Nugget was down a fraction at $30.6 million; Harrah's earned $89.3 million, down over 10%; Resorts earned $21 million, down nearly 24%; and Tropicana earned nearly $110 million, down 7.6%.
Among internet-only entities, Caesars Interactive Entertainment NJ earned $32.7 million, nearly doubling its earnings from a year earlier, and Resorts Digital, the online arm of Resorts Casino, earned $15.4 million, up 2.8%.
Compared to pre-pandemic 2019, only four casinos earned more in 2022: Hard Rock, Ocean, Resorts and Tropicana, although Harrah's came close to breaking even on this comparison.
In terms of hotel room costs, Ocean had the highest average price per night in 2022 at $265.75. Resorts had the lowest average price at $126.34.
Hard Rock had the highest occupancy rate at 88.6%, while Bally's, Harrah's, Resorts and Tropicana were all around 68%. For the nine casinos collectively, the occupancy rate in 2022 was 73.4%, up nearly 6% from a year earlier.
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Follow Wayne Parry on Twitter at www.twitter.com/WayneParryAC