The first quarter profit results for Atlantic City are in and this year has seen a decrease. Will the two new gaming venues coming this summer help?
The New Jersey Casino Control Commission released the first quarter profit numbers for casinos in Atlantic City this week, with the seven gaming venues seeing a reduction in earnings for 2018. The reduction has many wondering if the market is already oversaturated and if the two new casinos set to open in a few weeks will be able to help or will hurt the market further. The Ocean Resort Casino and the Hard Rock Atlantic City will be opening in late June, which will move the number of casinos in operation to nine in total.
Lowered First Quarter Profits
The numbers show the seven operating casinos of AC brought in $599.2 million in revenues from January to March 31st. Gross operating profits came in at $123.6 million. Both are declines when looking at the first three months of 2017, with a drop of 3.2% for revenue and 11.7% with operating profit.
Each of the operators were in the negative when it came to revenues earned during the three month time frame with the largest drop seen by Caesars. The operator was down 38% when compared to 2017. The Borgata also experienced a large drop in revenues, as much as 27% when compared to the first quarter last year.
2017 was a great year for casinos in Atlantic City and 2018 seems to be a bit of a slump. Last year, the combined profit was up almost one-quarter from the previous year. However, in 2018, severe weather early on seems to stop players from visiting the casinos, which hurt the bottom line. Along with lowered gaming revenues, the area saw a decrease in hotel occupancy. Down 3.2 points with 77.9% occupancy in the first quarter, it seems visitors choose to stay home rather than spend the night at local hotels.
By the end of June, two new casinos will be in the mix, with two scenarios that could happen. The Ocean Resorts Casino and Hard Rock Atlantic City could siphon off customers of other gaming venues which will cause the totals of other gaming operators to drop more, or the two could open and bring in a slew of new guests to the region and create a boost for the area.
It is unclear how the two will affect the industry and we won’t have a clear picture until a few months after operations begin. Both will offer casino gaming and entertainment as well as accommodations, which should be enticing to residents as well as visitors, at least in the beginning. Over the next few months, we should be able to see how the casinos effect the market and how well received they are by the locals and tourists in the coming months.
Both are set to offer online gaming, which will only add to an already large market. However, unlike the land-based venues, the online gaming industry is booming and is showing no sign of slowing down. Over $20 million is generated month after month as players log online to play their favorite casino games. It will be interesting to see what the two new casinos offer by way of online gaming and if they help the industry to continue to push past the $20 million mark, even pushing more towards $30 million in monthly totals.