The coronavirus pandemic has been hard on society in general. It has especially impacted retail operations that require onsite visitors for business revenue. Closing for several months from spring through early summer devasted Atlantic City casino revenues. Ongoing capacity limits due to health and safety protocols continues to negatively affect business. Heading into the final month of the year, the proof of impact lies in the casino’s revenue figures. So, how are the Coronavirus pandemic restrictions suppress Atlantic City casino hotels profit?
How Do Coronavirus Pandemic Restrictions Suppress Atlantic City Casinos?
The New Jersey Division of Gaming Enforcement recently released the financial results for the third quarter. The good news is that all nine Atlantic City casinos reported a gross operating profit. Yet, their collective profits fell by 37 percent from July through September against the same numbers last year.
Contributing to the profit loss are capacity limits in the casinos themselves. Costly measures to comply with state health and safety guidelines have also taken their toll.
The cost of doing business during the coronavirus pandemic has been a detriment across the entire entertainment industry. Land-based casinos have been hit especially hard with capacity limits as low as 25 percent in place.
The nine AC casinos brought in $150.5 million in revenue during the third quarter this year.
That same figure for the third quarter of 2019 was $239.6 million. The only venue posting an increase quarter-to-quarter was the Ocean Casino Resort. As one of the newest casinos in AC, it made $24.4 million this year. The venue’s operating profit for the same timeframe last year was $10.2 million.
Jane Bokunewicz is the coordinator of the gambling and tourism institute at Stockton University. In a recent industry report, she stated:
“The data released today confirms what many have already suspected. The current public health crisis has both suppressed consumer demand for brick-and-mortar casino gaming and related amenities. And increased the costs of operating these services. This is a devastating equation for casino operators and their employees.”
Also weighing in on the current situation was James Plousis as the chairman of the New Jersey Casino Control Commission. He pointed out the large investment in order to first reopen after an extended shutdown. He also mentioned the ongoing investment to satisfy current health and safety protocols.
Atlantic City casino’s gross operating profit represents earnings before accounting for:
Interest
Taxes
Depreciation
Other Expenses
This figure is widely accepted as the proper measure of profitability in the Atlantic City casino industry.
A few more individual results point to a 14.3 percent loss by Hard Rock Atlantic City. Harrah’s quarterly decline was one of the highest at 41.5 percent. Golden Nugget lost 11 percent.
Bally’s Atlantic City lost 8.3 percent in the process of being sold by Caesars Entertainment. The new owner is Bally’s Corp. The Rhode Island-based company was previously known as Twin River Worldwide Holdings.
The biggest AC casino in revenue is Borgata. Closed longer than the others, it lost 97 percent of its gross operating profit.
• Source: Atlantic City casino earnings fall 37% amid pandemic limits from NJ.com On November 23, 2020.
