Atlantic City looks to regain its casino splendor

Third quarter results got the gaming authorities concerned about what future lies ahead for the segment after two new venues opened last year.

US.- Third-quarter numbers released by the New Jersey Division of Gaming Enforcement (DGE) showed the opening of two new casinos to Atlantic City’s gaming market has affected profits but it just wasn’t how they were expecting. Even as net revenue was up by nearly 18%, gross operating profits dropped and the industry would’ve had negative revenues shouldn’t new venues arrive in the city.

Gross operating profits in the three-month period were US$213.7 million, a decrease of 15.3% from the same period last year when the number was US$252.3 million. The casino industry generated more than US$919.9 million in net revenue in the third quarter, significantly higher than the US$781.2 million registered last year. Nonetheless, without the recently opened Hard Rock and Ocean Resort casinos, industry revenues would’ve been down by US$20 million.

“The opening of two new casinos in late June plus the advent of sports betting at the same time explains the surge in net revenues in the third quarter and increase in total industry gross gaming win through October,” New Jersey analyst Tony Marino said. “The publicity and media interest accompanying the new casinos and the long-anticipated legalisation of sports betting was intense and came at the perfect time – the beginning of Atlantic City’s historically robust summer season. In other words, the timing could not have been better.”

“If Atlantic City’s past history has taught us to be realistic, we should anticipate that total year-round demand may not be sufficient to keep all nine casinos profitable by 2020 and beyond,” he warned and explained: “Without major infrastructure changes and effective marketing programs, another round of right-sizing the casino industry is likely in Atlantic City’s future.”