Atlantic City casinos announced a serious profit plunge on the same day that former AC casino exec Bruce Deifik was killed in a car crash.
On Monday, the New Jersey Division of Gaming Enforcement released its 2018 casino financial performance numbers, which showed overall revenue (not just from gaming) hitting just under $2.9b last year, a 7.5% improvement over 2017’s result. However, the casinos’ gross operating profit tumbled 15.4% to $582.6m.
The revenue gains were somewhat illusory, as only one casino – Golden Nugget – posted a year-on-year revenue improvement ($247.7m, +5.8%), and that was primarily on the strength of its online casino operations. The Nugget was also one of only two casinos to post an annual operating profit gain ($45m, +12.5%), and the Tropicana just barely made that grade ($93.4m, +1.4%). The market-leading Borgata posted the biggest profit decline, falling 18.8% to $206.4m.
Last year’s revenue gain was made possible via a surge in online gambling activity but 2018 also marked the arrival of legal sports betting in AC. However, the rush to build both land-based and online sportsbooks will have led to a flurry of one-off costs.
The profit decline was significantly worse in the fourth quarter of 2018, falling 41% to just $75.1m, despite revenue rising 13.7% to $709.3m during the quarter. The Borgata and the Trop were the only profit gainers, and the Borgata was up only 0.5%.
Last year’s numbers weren’t helped by the casinos’ hotel occupancy rate falling 6.2 points to 80.7%. The Hard Rock Atlantic City, which opened its doors last June, ranked lowest on the occupancy chart with a mere 61.3%, in part due to its average room rate being second-highest. Ocean Resort Casino, which opened on the same day as the Hard Rock, scored a more respectable 77% occupancy.
Both of the new casinos finished 2018 in the red, with Hard Rock posting a $9.1m loss and Ocean Resort losing $17.8m. The extent to which Ocean Resort had been financially struggling became apparent following the property’s ownership transfer to the Luxor Capital Group in January.
Sadly, Monday brought word that Ocean Resort’s former owner Bruce Deifik had been killed in a car crash in his hometown of Denver. The 64-year-old Deifik (pictured) was reportedly driving home from a Colorado Rockies baseball game on Sunday when he reportedly suffered a medical episode, after which his car struck a light pole.
Ocean Resort issued a statement expressing sadness at the news, adding that “the Ocean family is grateful for Bruce having the vision to reopen this beautiful oceanfront property and employing over 3,000 members of our community.”