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Aristocrat Interactive Games Now Live on Hard Rock Bet in New Jersey
Atlantic City New Venues Open, Profits Decrease
November 27, 2018 Jim Murphy
Two casinos have been opened in Atlantic City, New Jersey and now the city has nine venues where people can test their luck. Despite the two additional casinos being accessible…
…the gross operating profits of Atlantic City gambling houses have decreased significantly in the third-quarter of 2018.
Figure Comparison
The downward trend is somewhat surprising. The New Jersey Division of Gaming Enforcement (DGE) released the numbers on Friday, showing drastic fluctuations.
All nine casinos in Atlantic City generated a combined net revenue of $920 million in the three months ending September 30. Compared to that same period in 2017, a 17.8% jump has been noted. As for this calendar year, the revenue went up by 6.4 percent and it is now $2.2 billion.
However, there is much more to it! In fact, the nine casinos had a gross operating profit of $213.7 million in this period and compared to the corresponding one in 2017….
….there is a notable 15.3 percent drop.
In case we focus on the data starting from January 1, 2018, it gets better but not promising. The proceeds fell by 9.3 percent to $508.7 million.
Two New Casinos
Two casinos opened in late June – Hard Rock Atlantic City, whose online presence has been noticed, and Ocean Resort Casino. These two facilities had an impact on the third-quarter figures…
…generating combined revenue of $178.5 million in total.
For this period, however, Hard Rock grossed $8.2 million and Ocean Resort Casino earned shy $1.4 million.
The “Original” Seven
In the meantime only two out of older casinos managed to up their profits, whereas none of them had revenue gains in the third quarter of 2018.
One of the venues with increased profits was Golden Nugget, reporting a 6.6 percent rise to $13.6 million. A large part of these earnings can be attributed to the online operations. The second lucky casino in this harsh period was Bally’s with a miniscule profit gain of 0.5 percent to $18.4 million.
Meanwhile, a casino suffering the biggest loss was Tropicana as they reported a $31.1 fall to 31.8 million. It is also worth mentioning the market leader Borgata with the profits tumbling down to 63.2 million or by 21.7 percent.
AC Estimates Are Hard to Predict
In a few years, five Atlantic City casinos were closed, one after another, which was considered to be the “right-sizing” of the market. The last one was the famous Taj Mahal which definitely stirred the pot and influenced the 2017 figures.
In the first quarter of this year, however, the profits fell by 11.7 percent. The reason for it were severe winter storms that hit the region, making customers stay at home rather than going out on a blizzard.
This wasn’t the case in Q3 and in addition to the casino profits going down…
…the markets hotel occupancy saw a downward trend in the first nine months of 2018 too. This is a call for the operators in AC to upgrade their marketing game if they want to see the difference in the numbers.
Source:
“Stradbrooke Steven “Atlantic City casino profits tumble after new venues launch”, calvinayre.com, November 24, 2018.
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There aren’t any problems with casinos but taxes. Gas tax has been introduced recently plus you need to pay for your parking and your stay. All of that and you can spend 50 bucks a night, which is not cool. These additional costs are the real issue here.