Atlantic City casinos saw their profits jump by nearly one-quarter in 2017 despite a relatively flat revenue performance.
According to figures released Monday by the New Jersey Division of Gaming Enforcement (DGE), the east coast tourist hub’s seven casino operators reported total revenue of $3.54b in 2017, up 0.9% from 2016’s tally. Counting contributions from the casinos’ third-party partners, the annual figure was up 0.5% to $3.74b.
The casinos’ gaming revenue was up 1.6% year-on-year to $2.56b, slightly below than the $2.66b the DGE originally reported in January. Room revenue slipped 3.6% to $391m despite occupancy rising 5.4 points to 86.9%, while food & beverage fell 0.8% to $427.3m and ‘entertainment & other’ rose 6% to $164.5m.
More to the point, the seven operators posted a combined gross operating profit of $723.3m, a 23.7% year-on-year improvement. Six of the casinos were in positive profit territory, with Caesars Entertainment’s Harrah’s property playing spoiler, as its profit fell 2.7% to $115.8m.
To virtually no one’s surprise, the market-leading Borgata led the profit parade with $292.5m, up 19.5% from 2016. Caesars Atlantic City ranked second with $92.1m (+19.5%), narrowly edging out the Tropicana’s $91.9m, although the Trop had the year’s biggest percentage gain at 71%.
Bally’s led the rest of the cast with $42.1m (+8.1%), followed by the Golden Nugget’s $40m (+38.3%) and Resorts’ $23.1m (+23.6%). The two internet-only operators in New Jersey’s regulated online gambling market – Resorts Digital and Caesars Interactive Entertainment New Jersey – reported profits of $14m and $11m, respectively.
The profit gains accelerated in the fourth quarter of 2017, with the combined total rising 36.5% to $161.4m, significantly higher than Q3’s 17.6% rise. Operators will hope to ride this momentum into the current reporting period.
Atlantic City’s casino profits have spiked since the market began its enforced downsizing in 2014, leading to five casino closures. But two of these properties – Hard Rock Atlantic City (the former Trump Taj Mahal) and Ocean Resort Casino (the former Revel) – are set to reopen this year, and fears abound that two more casino mouths to feed could cannibalize revenue and stop the profit party cold.