Then came the opening of casinos in New York and Pennsylvania that year, and the industry fell into a freefall for many years that culminated in the closing of five out of 12 casinos in Atlantic City in 2014-16.
And how is the Atlantic City casino industry doing these days? A pair of reports released last week by the New Jersey Division of Gaming Enforcement provides fodder for optimists and pessimists alike.
For instance, casino revenue in October amounted to $423 million – up 6.6% over October 2022.
And the city’s nine casinos in the third quarter of 2023 showed slightly better numbers than the same period in 2019, before the disastrous impact of the COVID-19 pandemic.
The casinos, which have taken in $2.4 billion in revenue from gamblers at its facilities this year, are on track to exceed 2019 overall numbers in that category.
And with the inclusion of online casino revenue figures, the overall total is likely to complete 2023 on a 10-year high.
Storm Clouds Also Apparent in AC
But only about one-third of New Jersey online casino revenue goes to the brick-and-mortar operators, with the rest being held by the foreign companies that run and manage the websites.
Also, the casinos in the third quarter experienced a 7.5% decline in gross operating profit compared to the third quarter of 2022.
That decline cut across most of the industry, with losses ranging from a low of a 42.6% decline for Resorts to a modest 1.7% drop for Borgata, which with $73.5 million in profit nearly doubled the output of all eight of its rivals. Resorts slipped into last place with profit of just $7.3 million.
The only two casinos to improve in the third quarter perhaps not coincidentally are the two casinos that opened on the same day in Atlantic City just over five years ago – Hard Rock and Ocean casinos.
Ocean was up a solid 10.9% to climb to third place at $38 million, while Hard Rock clung to second on the heels of an 0.6% boost to $44.3 million.
Also, a comparison of retail casino revenue for October 2019 vs. October 2023 shows a wide range of results.
Ocean – built from the ruins of the spectacular failure that was Revel casino on the city’s fabled Boardwalk – more than doubled its revenue last month to $43.4 million.
That enabled Ocean to soar past four rivals compared to four years ago and into the runnerup slot in the city’s casino rankings behind the iconic Borgata ($56.9 million, off about a 10% boost from 2019).
Right behind was Hard Rock, which nearly doubled its own revenue to $41.2 million. Both of the newest properties have opened up a massive advantage over the remaining six casinos – all but one of which claimed more revenue in October 2019 than were collected last month.
Tropicana led that tightly-bunched group of casinos at $17.8 million in revenue, while Golden Nugget fell to last place at $12.2 million. The one second-tier casino to improve its lot was Resorts, which at $13.3 million improved by 10%.
Expert Weighs in on the New Numbers
“Despite anecdotal observations suggesting a decline in on-property activity, the numbers for brick-and-mortar activity for 2023 year-to-date are favorable,” concluded Jane Bokunewicz, director of the Lloyd Levenson Institute at Stockton University and an expert on the state’s casino industry – all of which is located within the Atlantic City limits.
“Following predictable seasonal trends, October 2023 total gross gaming revenues for Atlantic City’s casinos declined slightly compared to September 2023 but increased compared to October 2022,” she added.
“The same pattern was seen in brick-and-mortar gaming revenues for Atlantic City’s operators. A slight decline in year-over-year revenue for Atlantic City sportsbook operators is likely part of normal fluctuations in gambling activities, especially as the handle for the month remained strong.”
As for the third quarter profitability results, Bokunewicz also did not express any major concern.
“While the industry would have liked to see more growth, the performance of net revenue in 2023 was relatively flat compared to last year and the year prior,” she said.
“In keeping with the experiences of many resort communities along the New Jersey shore, Atlantic City saw a bit of a cooling off in summer 2023 compared to the pent-up post-pandemic energy seen in 2021 and 2022,” she said. “That said, it did outperform pre-pandemic 2019 for both net revenue and gross operating profit.
“After coming to a near standstill with the pandemic lockdowns, there was a burst of activity once people were able to travel freely again – boosting returns in 2021 and 2022. The present slowdown may be simply the system righting itself – overcorrecting after the swell.”
Football Season Means the Return of “Billion” to NJ Sports Betting Figures
For a second straight month, gamblers risked more than $1 billion in October – $1.293 billion, to be more precise. That boosted the amount wagered in the state to just over $9 billion in 2023.
In September, the amount wagered was nearly identical – $1.299 billion.
New Jersey nearly had its first “billion dollar month” of wagers in December of 2020, when $996 million was risked by bettors. So it was no surprise when September 2021 – marking the start of another fall football season for the NFL and NCAA – climbed slightly to $1.01 billion.
The following month marked a still-standing record of $1.303 billion in bets at New Jersey online sportsbooks, but this fall’s first two months suggest that the record may be due to fall in the coming final weeks of 2023.
Nine of the last 10 “football months” have produced $1 billion in handle, with the exception being September 2022 ($867 million).
