Atlantic City casinos reported healthy profits in 2016 despite posting extremely modest revenue gains.
Figures released Friday by the New Jersey Division of Gaming Enforcement (DGE) show AC casinos’ total revenue inched up 0.4% to $3.51b in 2016 but gross operating profit hit $587.4m, up 7.3% year-on-year. It’s worth noting that 2015’s report included a full year’s contribution from the Trump Taj Mahal, which closed in October 2016.
The 2016 revenue gain was driven by casino sales, which rose just shy of 1% to $2.52b, and entertainment revenue, which gained 2.1% to $154.5m. Room revenue declined 0.2% to $405.4m despite room occupancy rising 0.7 points to 81.5%, while food and beverage revenue declined 2.2% to $431m. Revenue from so-called third party businesses – which lease space on casino property to provide food, beverage, entertainment, hospitality or retail products – was basically flat at $208.8m.
Four of AC’s seven current casino operators posted profit rises in 2016, led by the Borgata’s $244.7m (+13.3%). The Golden Nugget posted the year’s biggest year-on-year improvement, rising 28.1% to $29m.
Caesars Entertainment’s Harrah’s casino was one of 2016’s three net decliners, despite its $119.1m (-3%) profit ranking second only to the Borgata. In fact, the other two net decliners were also Caesars properties, with Caesars AC falling 3.7% to $80.3m and Bally’s off 2.5% to $39m.
The DGE also reported 2016 results for two AC operators who only offer online gambling. Caesars Interactive Entertainment New Jersey reported a profit of $9.77m, up 143% from 2015, despite revenue gaining only 18.3% to $26.6m. Resorts Digital reported revenue nearly tripling to $20.4m but still recorded a net loss of $1.37m, although that’s a notable improvement from 2015’s $6.5m loss.
The DGE’s figures for Q4 2016 were even more positive, with all seven current casino operators reporting net profit gains. Casino Control Chairman Matthew Levinson said “you have to search pretty hard to find anything other than positives” in the Q4 numbers, which he praised as “a strong finish to a very good year.”
The Taj Mahal reported a net loss of $5.5m in 2016 versus the modest $3.1m profit it enjoyed in 2015. The shuttered property has since been taken over by Florida’s Hard Rock International, which this week unveiled a $375m rejuvenation program that will see the venue reopen in summer 2018.
