On Thursday, the New Jersey Division of Gaming Enforcement (DGE) released its second quarter financial results for Atlantic City’s nine casinos, which saw net revenue rise 18.2% to $806.8m in the three months ending June 30. However, those same nine venues reported gross operating profit falling 6.8% to $159.3m.
The picture is even worse when one includes the Q1 results, which were particularly dire. Over the first half of 2019, revenue is up 17.8% to $1.51b while profit is down 16.8% to $245.1m. Glass half-full types will point to the fact that Q2’s profit decline slowed dramatically from the 29.6% decline reported in Q1.
AC’s two newest properties – the Hard Rock Atlantic City and the Ocean Casino Resort – were only open for a few days in Q2 2018, so their year-on-year comparisons are meaningless. But all seven of the other properties that were open in both periods reported falling revenue, while only the market-leading Borgata casino reported a profit gain, albeit a minor one (+4.7%).
The Borgata accounted for one-quarter ($202m) of all Q2 revenue, while the Hard Rock ranked second with an impressive $103.7m. Harrah’s ranked third with $96.4m.
The biggest revenue decliners were Caesars (-11.2%), the Golden Nugget (-10.6%) and Harrah’s (-9.3%), while the same trio also led the profit plungers: Caesars (-33.7%), Nugget (-28.8%) and Harrah’s (-27%).
However, while all nine casinos reported profit declines in Q2, Ocean Casino Resort was the only property to post an actual operating loss (-$1.2m) during the quarter (the company has been a bit distracted this year). The Borgata ranked first on the profit chart with $55.4m, followed by Harrah’s ($23m) and the Tropicana ($22.6m).
AC’s hotel occupancy rate was 81.5% in Q2, down 3.3 points year-on-year. For the first half of the year, occupancy is down 4.3 points to 77.1%.
Ocean Casino Resort led Q2’s occupancy chart with an impressive 91% (despite having the second-highest average room rate), with Caesars not far behind at 89.5%, so the latter property’s issues appear to involve people checking in and then doing stuff elsewhere in AC. The Nugget was the occupancy bottom feeder at 70.5%.
Interestingly, the two online-only entities tracked by the DGE – Caesars Interactive Entertainment New Jersey and Resorts Digital – each reported revenue rising nearly one-third (the state’s online gambling market has been on fire this year. CIENJ’s operating profit was up 71.6% to $5m while Resorts improved nearly 400% to an admittedly minor $1.95m.