START SPREADING THE NEWS: ATLANTIC CITY CASINOS REPORT 3RD QUARTER GROWTH
The New Jersey Division of Gaming Enforcement (NJDGE) released third-quarter earnings figures for nine Atlantic City casinos.
The whole net revenue for its NJ casinos came in just shy of $929 million for July. The amount is good to get a 2.7% increase in comparison with the same period in 2018.
Gross operating profits were on the increase, increasing 12.5% to $239.4 million when compared to third quarter of 2018.
The AC casino triple report marks the first-time revenue and gains can be compared to the year with the exact same nine casinos in operation today.
The quarterly report comprises a mixed-bag of metrics that could offer a bird’s-eye view of the area and the business do.
Borgata Casino continues its dominance, almost doubling the internet earnings of its closest competition using $235.5 million. Even so, it’s a small decrease (0.3percent ) from last year.
It is the competitor, that’s a big surprise. Hard Rock Atlantic City came in second in $128.4 million, an impressive 27.7percent over its first months of operation at 2018.
The sole other casino to report double-digit net revenue growth in the third quarter is the other newcomer to the Boardwalk, Ocean Casino (27.4percent ), using roughly $79.9 million.
At the rear of the bunch is Resorts, posting $49.6 million on net revenue. On the other hand, along with Hard Rock and Ocean casinos, Resorts is your only other casino coming a positive net revenue number (+1.3%).
Bally’s Atlantic City has been the hardest hit. It posted a net earnings number ($60.8 million) that puts it second from the bottomdown nearly 9.3% from last year. That is the largest percentage reduction for this group.
Casino Control Commission Chairman James Plousis talked to the Press of Atlantic City concerning other key indicators in the quarter:
In particular, the hotel room occupancy of the industry came in over 90%, up 8 percent from last year.
The major winner was Ocean Casino. It reported that a 99.6% occupancy rate and also commanded the greatest average price at $219 per night.
On the base of the totem pole is Tropicana, with an 80.9% occupancy rate, the smallest of the nine casinos.
Furthermore, Golden Nugget comes in with the lowest average nightly room rate of $90.25, almost $71 less than the market average.
Evidently, a whole lot of numbers that are year-over-year that are positive is a fantastic thing.
The news is at a time when many citing market equilibrium are questioning the need to set a limit on the number of AC casinos, and protecting the viability of the properties.
It is true that one quarterly profit statement doesn’t provide data to support either side of this argument. Though it will make it somewhat harder to confirm the saturation argument once amounts are being returned by the industry.
The actual key to the overall health of Atlantic City is nongaming revenue. It came in at 3.5% over precisely the exact same period last year.
There’s evidence that Atlantic City is continuing to change toward a Las Vegas model. Revenue in AC represents over 47 percent of overall revenue. The Las Vegas nongaming revenue comes in at 65 percent of total revenue.
Rummy Pandit, executive manager of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism in Stockton University, commented on the record in the same Press of Atlantic City article.
Atlantic City casinos introduced positive earnings growth for the previous six quarters. Year to date, however, the industry is down 4.5% in contrast to 2018.
It is not a surprise that Atlantic City is a seasonal destination. But if AC will continue to improve its nongaming sales, it could successfully transition into a destination similar to Las Vegas.
Banking on a strong season to encourage the business for the year will be a thing of the past, if this is so.
Perhaps the discussion around market saturation and capping casinos will drop by the wayside.