The second quarter of 2019 marked a further dip in profits for casinos in Atlantic City. The New Jersey Division of Gaming Enforcement (DGE) reported that, while revenue had increased 18.2%, profits were down 6.8%. The trend has continued into the third quarter and the nine casinos in the state are reducing staffing levels in an effort to stem the losses.
According to DGE data, August saw casinos reduce their workforce totals by about 4%, with 1,158 positions being eliminated. Part-time positions, however, expanded, increasing from 2,897 that were seen in August of last year to 3,051 this year. Full-time positions went from 22,111 to 19,812, a year-on-year drop of 10.4%.
Atlantic City apparently had a weak summer in general. The Press of Atlantic City reports that employment numbers for the city were down by just under 3% from June through August, but those numbers could be a little skewed. Ocean Casino and Hard Rock both launched casinos in the city toward the end of June last year, resulting in a sudden hiring spree that produced abnormal spikes. Many businesses often hire more employees than are needed when they first get going, thinning the list as operations progress.
As the DGE tells it, gross gaming revenue (GGR) in Atlantic City has grown by 18.4% this year to $1.85 billion. At the same time, though, gross operating profits have dropped to $49.3 million, a year-on-year loss of 16.8%. The gaming regulator defines gross operating profits as “earnings before interest, taxes, depreciation, amortization, charges from affiliates, and other miscellaneous items as reflected on each casino licensees’ income statement” and adds that it is a “widely-accepted measure of profitability.”
As a result of how the numbers are crunched, the addition of two gambling venues has weighed against the performance. When the third quarter wraps up, though, the real state of affairs in Atlantic City should become clear, as it will be the first time two complete quarters are available for comparison against each other.
Borgata accounted for most of the casino jobs in Atlantic City with 5,843 in August. This isn’t too surprising, given that the property was the only one in the city to report a profit for the second quarter. It accounted for one-fourth of all of the revenue in the period.