Atlantic City’s Third-Quarter Revenue Fell by 37%

Atlantic City Casinos

New Jersey’s casino industry is one of the biggest in the United States. Unfortunately, the events of 2020 have been extremely hard on the casino companies operating here. New reports have just come out that show Atlantic City’s third-quarter revenue fell by 37% this year.

It’s an astounding drop to see. Unfortunately, some believe that the year’s fourth-quarter earnings may drop even more. Today, we will take a look at which properties managed to bring in the most money.

Let’s get into it!

Governor Murphy Claims New Regulations Could Be Coming Soon

This has been a remarkably difficult year for state leaders around the country. Governors are being forced to implement measures that have a massive effect on the local economy. Trying to protect public safety while keeping the economy afloat is proving to be extremely difficult.

Unfortunately, Governor Phil Murphy has been warning that additional regulations could soon be on their way. New Jersey has been seeing a sharp increase in Covid-10 cases recently. This past Monday, an additional 4,790 cases were recorded in the state with 16 new deaths.

Murphy has already implemented several new regulations over the past few months. Many of these have targeted casinos. Earlier this month, he started ordering casino restaurants to stop offering indoor dining past a certain time.

Many now fear that the casinos in Atlantic City could be forced to completely shut down. Several different states have recently shut down their casinos. Unless New Jersey’s infection rate begins to drop, this could be coming here, as well.

More regulations will have a serious impact on the casino industry here. As many know, the casinos in this state have been hurting badly over the past nine months. No one knows how things will look in the future.

We’re now beginning to see how much money the casinos in New Jersey lost over the months of July, August, and September.

Here’s Where Atlantic City’s Third-Quarter Revenue Stands

Many analysts have been eagerly waiting to see how the casinos in New Jersey managed to fare during 2020’s third quarter. We’ve seen several other major casino destinations release their revenue reports recently. This week, New Jersey did the same!

Things are about as bleak as many predicted. The casinos in New Jersey saw a massive 37% drop in revenue during the year’s third quarter. Capacity limits and other intense regulations have contributed to this large drop in earnings.

Overall, the casinos in this state brought in just $150.5 million over the months of July, August, and September. The vast majority of casinos here saw a large drop in earnings. Only the Ocean Casino Resort, previously one of the worst-performing casinos in the state, saw a revenue increase.

Jane Bokunewicz, coordinator of a gambling and tourism institute at Stockton University and respected gaming analyst, spoke about this drop to the media this week.

“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,” she said. “This is a devastating equation for casino operators and their employees.”

Hard Rock Atlantic City’s gross operating profit fell by 14.3%. Tropicana AC saw a massive 43.8% drop in revenue. It’s an extremely difficult time for all of the casinos operating in the state of New Jersey.

We’ll continue offering updates on any additional regulations placed here over the next few weeks!

Nevada Casinos Are Now Limited to Just 25% Capacity

Things aren’t much better over in Nevada. This state remains the biggest casino destination in the country. Unfortunately, casino revenue has been dropping considerably this year and is likely to drop even further over the next couple of months.

Over the weekend, Nevada Governor Steve Sisolak announced a new set of regulations on different businesses. Many of these regulations are directly targeting casinos. Under the new state rules, Nevada’s casinos can only operate at 25% capacity.

Sisolak understands the impact of these new regulations. He also understands that something needs to be done to lower infection rates in the state. It seems likely that these new rules will have an impact on tourism into the city.

The new rules put an end to all of the major entertainment shows in Las Vegas. Many of the major casino-resorts on the Las Vegas Strip were set to resume their big shows. These will now be put on hold for at least the next three weeks.

The US casino industry is being put to the test like never before. Hope is that new regulations help to lower infections around the US. Stay tuned for more news on the casino rules being set in place over the rest of the year!

Are you surprised to see where Atlantic City’s third-quarter revenue stands? When do you think things will begin to improve here? Let us know in the comments section below!

The Sale of Bally’s AC Has Officially Concluded!

Bally's Atlantic City

Back in April, news broke that Caesars Entertainment was selling Bally’s Atlantic City to Twin River Holdings. It was one of the largest acquisitions for Twin River as a company in its history. New reports claim that the sale of Bally’s AC has now officially concluded.

Twin River is now going by Bally’s name. This company has worked hard to expand around the United States over the past few years. Today, we’re going to talk about what this sale means for Atlantic City moving forward.

Let’s get into it!

Caesars Entertainment Has Undergone Some Major Changes Recently

The name Caesars is synonymous with flashy hotels and casinos. This company was founded back in 1990 and quickly took control over some of the biggest and best gambling venues in the country. Over the past decade, however, the company began seeing large revenue declines.

In 2019, news broke that Eldorado Resorts paid an astounding $17 billion to acquire Caesars Entertainment. It was the largest casino sale in history. As many expected, however, it took more than a year for this deal to go through.

In order to gain approval from state gambling commissions and the SEC, both of these companies needed to make some major changes. Much of that centered around casino sales. Commissions wanted to ensure that this merged company would not form a monopoly.

This merger has been completed and things seem to be running smoothly. Not long ago, the new Caesars purchased Willaim Hill for more than $3 billion. This was done in an effort to break into the fast-growing US sports betting industry.

Caesars has also sold many of its properties recently. To the surprise of analysts, the company allowed Twin River to take control of its Bally’s brand name. Twin River is now known as Bally’s Corporation and is focused on expansion, too.

We’re set to see some big changes with Bally’s casino in Atlantic City sometime in the near future.

The Sale of Bally’s AC Has Finally Concluded!

As we just mentioned, Caesars Entertainment has gone through several major casino sales over the last year and a half. The company announced it was selling Bally’s Atlantic City to Twin River Holdings back in April. This sale was instrumental in Caesars getting its merger approval from the New Jersey Gaming Commission.

A major casino sale like this cannot happen overnight, though. There were several hoops that both Caesars and Twin River (now known as Bally’s Corporation) needed to jump through. Fortunately, this sale has now officially concluded.

The acquisition price for this venue was $25 million. That’s a good deal when considering the venue is situated in one of the country’s biggest gambling destinations. Historically speaking, however, Bally’s Atlantic City is one of the worst-performing casinos in New Jersey.

Officials within Bally’s Corporation are confident they can turn things around. Earlier this month, the company pledged to invest more than $90 million towards renovations for this venue. The goal is to make this the best new gambling venue in the city.

George Papanier, President and Chief Executive Officer of Bally’s Corporation released a statement this week on the final sale of this venue.

“We strongly believe in the potential of the Atlantic City market and are confident that we can restore Bally’s to its former glory,” he said. “We are pleased to close on this transaction, which represents the latest addition in our ongoing portfolio diversification strategy, and look forward to implementing our capital improvement plans to completely renovate the property with first-in-class amenities and offerings. We have a proven track record of implementing strategic initiatives at acquired properties in order to drive growth and revenue improvements, and plan to bring the iconic property to a level not seen in years.”

This is one of the biggest moves for Bally’s Corporation in years. Atlantic City has been improving massively over the years. 2020 has halted much of the progress being made, yet many analysts expect things to recover next year.

New Jersey’s Online Gambling Revenue is Holding Strong

The country’s land-based casino industry has been hurting badly this year. For months, all casinos around the US were completely shut down. Many, including some of the ones in Las Vegas, have remained closed to this day.

New Jersey started allowing its casinos to open again in July. Like casinos in other states, these venues struggled to attract players. As time went on and regulations were lifted, more people began flocking to Atlantic City.

Land-based casino revenue remains low, even with the uptick in tourism. Fortunately, New Jersey has a regulated online sports betting and casino gambling industry. These online gaming platforms are bringing the state some much-needed revenue right now.

New Jersey is proving how valuable these online gambling options can be. In October, for example, the state broke its own all-time revenue record for sports betting and online casino gambling. Many other states are now looking more into the regulation of these gambling options.

Many expect additional regulations to begin hitting the casinos in New Jersey. Earlier this month, Governor Murphy began ordering casino restaurants to close at night. He has warned that if things do not recover, the casinos here may be forced to shut down again. With the sale of Bally’s AC now finalized, everyone hopes that things are better here by the time the venue’s renovation is complete.

Are you excited to see what Bally’s Corporation does to its new casino in Atlantic City? Do you think the casinos in New Jersey will need to shut down again? Let us know in the comments section below!

Legal Atlantic City Sports Betting Sets Records As Casinos Continue To Struggle

Atlantic City Casinos
Atlantic City’s sports betting and online gambling numbers continue to make up for the decline in the revenue of the city’s nine brick and mortar casinos.

Atlantic City casinos reported a year over year decrease of 8% in Gaming wins for the month of October. However, online gaming revenue increased by more than 106% last month, contributing a total of $93.45M to the total monthly revenue of the industry. The total gaming revenue for the month of October, per the state’s Division of Gaming Enforcement, was $304M.

Atlantic City Casino Control Commission chairman James Plousis gave credit to the gambling industry’s October 2020 performance during these difficult times. Said Plousis:

“During this time, Atlantic City continues to show resilience in the face of necessary and ongoing restrictions on capacity, amenities and entertainment.”

Impact of the Pandemic

The decrease in the revenue from table games and slot machines shows the impact of the COVID-19 pandemic in Atlantic City casinos. These brick and mortar gambling places were forced to close for 107 days beginning March 16th. They were allowed to reopen in early July but the capacity limitations, travel restrictions, and national recession have resulted in the decline of casino win in every month.

Atlantic City casinos reported $186.1M in casino win for October 2020. That amount is short of at least $16M from the total for October 2019. Of the nine Atlantic City casinos, only the Hard Rock Hotel & Casino Atlantic City and Ocean Casino Resort, reported an increase in casino win for October 2020.

Through the first 10 months of 2020, the total gaming revenue and casino win have decreased by 23% and 46% respectively, compared to the same period last year. With two months left in the year, it’s unlikely that this year’s revenue will match 2019’s high of $3.29B in total casino industry gaming revenue.

Sports Betting Sets Records

While Atlantic City casino revenues continue to struggle, AC’s sports betting industry continues to set records. Sports gamblers wagered a record $803M during the month of October. These included bets placed at brick and mortar casinos, Atlantic City online gambling sites, and the city’s three racetracks.

Legal Atlantic City sports betting benefited from the MLB’s World Series and the NBA Finals which were both held last month. Likewise, the the NFL and NCAA college football started their respective seasons in October. As a result, October’s monthly handle easily bested the previous record of $748.6M set in September 2020.

New Jersey’s sportsbooks have taken nearly $4.1B in legal sports bets on a year to date basis. This has put the Atlantic City sports betting market on pace to break Nevada’s single-year record of $5.3M in sports wagers made .

Atlantic City Casino Restaurants are Ordered to Shift Hours

Atlantic City Casinos

The US casino industry continues to get hit with tough regulations. Most recently, state officials in New Jersey have begun setting new rules towards the casinos in Atlantic City. Moving forward, Atlantic City casino restaurants will need to close their indoor operations by 10 pm every night.

It’s a tough blow for these venues. Fortunately, the state isn’t requiring a complete shutdown. Today, we’re going to talk about why these new rules are being set in place.

Let’s get into it!

Sports Betting Remains Hugely Profitable for New Jersey

Many credit New Jersey with helping to revolutionize the US sports betting industry. Almost immediately after PASPA was struck down back in 2018, this state officially legalized and regulated this industry. It’s already proving to be hugely profitable for the state.

We’ve been covering the growing sports betting revenue figures in New Jersey for months. To the surprise of many, these figures have increased throughout 2020. The sportsbooks here have seen their handle hit all-time records in both August and September.

It’s fantastic news for the state. New Jersey taxes sports betting revenue at 8.5% for land-based bets, and 13% for online sports wagers. As more revenue comes in, the state earns more money via taxes. This money goes to fund various public projects.

NFL betting is helping to fuel much of this revenue increase. We’re now in week 10 of the regular season. A huge amount of money is being placed on the regular-season games every single week.

Sports betting has helped to lessen the blow that casinos are feeling this year. As many already know, casino revenue has been much lower in 2020 than it was last year. No one can accurately say when land-based casinos will begin seeing their revenue figures reach pre-pandemic levels.

This week, a new regulation was announced that could have an effect on tourism rates in Atlantic City.

Gov. Murphy Orders Atlantic City Casino Restaurants to Change Hours

New Jersey was one of the worst-affected states from the pandemic early on. For months, nearly the entire state went into lockdown in an attempt to lower infection numbers. This proved to be devastating for Atlantic City and the thousands of individuals employed here.

Finally, in July, Governor Murphy gave the green light for the casinos in this city to begin operating again. As the weeks went on, more of the gambling properties began opening their doors. Today, all of New Jersey’s casinos are operational again.

Unfortunately, New Jersey has once again begun seeing a large spike in Covid-19 cases. As a result, the Governor has been forced to implement heavier restrictions. News has just broken that, beginning on Thursday, all Atlantic City casino restaurants will need to close their indoor operations by 10 pm.

This could affect tourism rates into the city. Many complain this measure does not make sense given the relatively low infection rates in Atlantic City. The Chamber of Commerce Southern New Jersey offered a statement on this new measure to the media this week.

“The CCSNJ respects Gov. Murphy’s decision to enact additional restrictions as the state again sees COVID-19 cases rise. However, the CCSNJ is disappointed that the governor has once again taken a statewide, one-size-fits-all approach, refusing to consider the vast disparities in health metrics throughout different geographical areas of the state,” the statement said. “The health and safety of New Jersey residents should always be the first priority, but there is no harm in assessing the data and making smart health and economic decisions that do not treat every area of the state similarly when the health data supports that approach.”

Casinos may be thankful that another shutdown wasn’t ordered. For now, these venues can continue operating at limited capacity. We’ll offer more updates on the situation here over the next few weeks.

Are More Regulations Coming to Las Vegas?

In some ways, Las Vegas has been the city hardest-hit by the pandemic. So much of the economy here relies on tourism. Even today, tourism numbers are down considerably from what they were in 2019.

The casino companies operating here are certainly feeling the effects. Many have been forced to lay off thousands of employees. Some, including Encore Las Vegas, have started changing their operating hours as a way to save money.

Many fear that new regulations will soon be announced here. Infection rates have been increasing in recent weeks. State leaders will need to weigh the pros and cons of implementing health protocols.

Doing so could prove devastating for the gambling and tourism industry in Las Vegas. We’ll need to wait and see what ends up taking place in this city. Hopefully, the casinos can remain open while keeping things as safe as possible for employees and patrons.

Beginning on Thursday, all Atlantic City casino restaurants will need to stop operating indoors at 10 pm. This measure will remain in place until further notice.

Are you surprised to see more regulations set in place in New Jersey? Do you think this new rule will affect tourism here? Let us know in the comments section below!

Twin River Pledges $90M For Rehab of Bally’s Atlantic City

Ballys Atlantic City
The Rhode Island company which is buying the worst-performing Atlantic City casino has pledged to upgrade the property and beef up its current offerings.

During a public hearing before the Casino Control Commission last Wednesday, Twin River Worldwide Holdings Inc. committed to spending $90M over the next five years to rehabilitate Bally’s Atlantic City and make it competitive again.

Twin River is requesting for an interim casino authorization, a preliminary regulatory procedure before the granting of a full casino license, to operate Bally’s Atlantic City. The Rhode Island company, which will be changing its name to Bally’s on November 9th, agreed to purchase the casino hotel property from Caesars Entertainment Inc. and VICI Properties for $25M.

Said, Marc Crisafaulli, Twin Rivers executive vice president of strategic development and government relations:

“We want to make sure Bally’s is competitive again and return it to its former glory. We’re committed to making it a signature property again, right at the center of the Boardwalk. We know it’s going to take a lot of time, effort and investment.”

Expanding the Atlantic City Market

At Wednesday’s hearing, Executives from Twin River highlighted several key areas for the development plan for Bally’s. These include a partnership with FanDuel for a permanent sportsbook which will be opened in March, the renovation of more than 900 hotel rooms, creation of 30-40 mini-suites, and a brand new restaurant with bar which will be completed by summer.

Twin River CEO and President George Papanier also addressed the issue of a re-launched Bally’s hurting the other Atlantic City casinos. Papanier assured the Commission that it would be using its existing customer database from the New England, Delaware, Maryland, and Virginia regions to expand AC’s gambling market.

Dead Last Among Nine AC Casinos

Bally’s Atlantic City was the third Atlantic City casino to open in 1979 and once led the market. But it has seen a steady decline and the last years have not been kind to it as Bally’s as it currently ranks dead last among the nine Atlantic City casinos in terms of revenue wins from gamblers. Bally’s Atlantic City has reported a win of $72M for the period January to September 2020. In contrast, AC’s top performing casino, the Borgata, has posted a $373M win over the same period.

Twin River initially planned to invest $56M in Bally’s but during Wednesday’s statement, it revealed that the amount has been increased to $90M. According to its Chief Finance Officer Stephen Capp, Twin Rivers has close to half-a-billion dollars worth of liquidity to draw upon.

Atlantic City Casinos Tell Governor: We Need Conventions

View of Atlantic City
A group composed of local officials, casino executives, and labor unions have asked Gov. Phil Murphy to ease restrictions on indoor gatherings so that conventions, meetings, and trade shows can resume in Atlantic City and so restaurants can accommodate more customers.

According to the group, if the current restrictions will be retained, businesses will incur significant losses, more jobs could be lost, and the economy will take longer to recover.

Said Assemblymen Vince Mazzeo and John Armato in a letter to the Governor:

“Without the convention and meeting industry, the negative economic impact to both large and small businesses, including lost wages, will be devastating to the market and residents of Atlantic City and Atlantic County,”

Added Mark Gianntonio, President and CEO of Resorts Casino Hotel:

“The casino industry has developed the most stringent health and safety protocols with the guidance of top healthcare experts. We have successfully and safely welcomed back indoor dining, and now is the time to begin to safely welcome back the convention and meeting business.”

Time of the Year For Conventions

November is traditionally the the time of year when Atlantic City is busy hosting multi-day conventions, bringing in thousands of visitors who would stay in hotels, patronize local restaurants and shops, and even finding their way to Atlantic City casinos. But because of the COVID-19 pandemic, conventions are still prohibited right now.

On a normal year, the New Jersey State League of Municipalities’ and New Jersey Education Association would be in AC holding their conventions this month. However, they have resorted to holding virtual conventions due to the pandemic. Those are just the tip of the iceberg.

Lost Economic Activity

According to an estimate from Meet AC, the sales and marketing organization of AC’s resorts, more than $182M in economic activity has been lost up to last week from cancelled conventions and meetings this year. This figure does not even include the canceled events at the casinos and the $112M that Atlantic City casinos lost during their forced closure from March to June this year.

The resorts have struggled with the 25% restriction in their properties and the total absence of conventions. Casino gaming has not returned to pre-pandemic figures mainly due to the restriction of travel and fear of contracting the COVID-19 virus. Because of this, Atlantic City casinos have been forced to cut jobs to mitigate losses. Last month, Atlantic City’s casinos reported a net decrease of 17.5% in employment versus 2019 figures.

Lucky Gambler Hits Massive Jackpot at Hard Rock Atlantic City

Casino Slot Machines, Hard Rock Atlantic City Logo

New Jersey’s casino industry is gradually improving as the months go on. Many are now heading to the casinos in Atlantic City to test their luck at the slots and table games. Today, news broke of one lucky player hitting a massive jackpot at Hard Rock Atlantic City.

This is likely one of the biggest casino jackpots hit in New Jersey this year. Today, we’ll take a look at how it was won. We’ll also talk about how Atlantic City is faring so far this year.

Let’s get into it!

Online Casino Gambling Grows More Popular Around the US

The US casino industry remains in a difficult position. Most casinos in the country are now open, yet many are seeing massive revenue losses this year. Certain states are faring better than others, though.

It’s no surprise that most are focused on the success of Nevada. This state remains the biggest gambling destination in the world. Cities like Las Vegas are now working hard to attract new players, yet tourism rates and casino revenue remains far lower this year than it was in 2019.

Some states’ casino industries are doing great, though. Colorado reopened its casinos back in May. Some that time, revenue from the industry has increased with each passing month. Sports betting revenue is surging here, too.

All land-based casinos are hurting right now. Interestingly, the popularity of online casino gambling sites has been surfing this year. It seems that many people now prefer to make their wagers from home, rather than inside a crowded casino.

There are a huge number of great internet casino platforms now available throughout the country. Several states are now pushing to regulate this industry. A few already do and are earning a huge amount of revenue each month.

Land-based casinos are doing everything they can to bring in more players. This week, one of the most popular casino-resorts in Atlantic City announced a huge jackpot winner.

New Jersey Resident Wins Huge Jackpot at Hard Rock Atlantic City

For the past few years, Atlantic City has grown to become one of the biggest and best casino destinations in the United States. The legalization of sports betting here seems to have brought new life to the city. Tourism started booming here and many casinos underwent major renovations.

There are many popular gambling venues in this city. There’s no doubt that the Hard Rock Atlantic City is one of the biggest and best. It was originally opened as the Trump Taj Mahal, but was converted to the Hard Rock brand in 2018.

This venue has been open for months and is seeing a steady increase in players. One lucky gambler from South New Jersey has just hit a massive $1.3 million jackpot while playing Texas Hold’em inside this casino. This gambler, named James, spoke about the win to the media this week.

“It is surreal to have hit a $1.3 million jackpot, especially because playing cards is a little different than laying pipe,” James said. “We plan to take care of our family, put money away for our kids and my wife deserves a nice trip.” 

This jackpot was one of several earned at the Hard Rock Atlantic City this week. These types of jackpots are likely to entice new gamblers. Hope is that other casino-resorts in the city begin seeing a surge in new players soon, as well.

Unfortunately, some analysts predict that winter will prove to be extremely difficult for the casinos here.

What to Expect in Atlantic City Over the Next Few Months

For months, health experts around the country have been warning that this winter will be one of the toughest in recent memory. Most expect to see a massive surge in Covid-19 cases. That could result in many cities and states being forced to shut down again.

Another shutdown would be devastating to casino companies. Many seem to be barely hanging on as it is. Officials in Atlantic City believe things will be tough this winter, yet don’t expect the type of shutdown seen this summer.

Las Vegas would be hit hard from another casino shutdown, as well. Casinos here are still seeing major dips in revenue and it’s unclear when things will return to normal. Several casinos here are being forced to close permanently.

Even the major casino-resorts are being impacted. Earlier this week, Wynn Resorts announced that the Encore Las Vegas would now only open for four days a week. This rule will remain in place until tourism rates increase in the city.

Now might be the perfect time to visit these gambling destinations like Las Vegas and Atlantic City. No one knows how things will look in the future. One lucky gambler just earned a huge jackpot at Hard Rock Atlantic City and you might be next!

Do you plan on gambling in Atlantic City this fall? Which casino do you plan on visiting? Let us know in the comments section below!

Judge Orders Ex-Borgata Executive to Return Mobile Phone

Borgata Hotel-Casino
Borgata Casino got a shot in the arm from Lady Justice last Thursday as a federal judge in Nevada ordered a former Borgata casino executive, among others, to return a company-issued mobile phone which contained valuable information on Borgata’s top players and highest rollers.

Aside from instructing the former Borgata exec to return the cell phone, U.S. judge Gloria Navarro also issued a temporary restraining order preventing the two former executives who left Borgata this summer to work for the Ocean Casino Resort from contacting any past, present, or prospective clients of the Borgata Casino. Navarro also ordered the two former Borgata executives not to share trade secrets or confidential information to their new employers.

Poaching Accusation

However, the judge did not order the two executives removed from their jobs at Ocean Casino despite violating unfair competition laws and agreements. In not terminating the two, Navarro reasoned that the plaintiff did not present evidence that proved Ocean knew that the two were using Borgata trade secrets in their current employment.

Last month, Borgata Casino accused Ocean Casino of “poaching” six former executives in what it called an “attempt to cripple “ it by using trade secrets and sensitive information about its top clients. Borgata proceeded to filing a lawsuit after it asserted that the hiring of their former officers violated New Jersey’s unfair competition laws.

Attempt To Cripple Borgata

The case centered on William Callahan and Kelly Ashman Burke, who worked with Borgata’s top clients, and who were recently hired by Ocean Casino. Borgata took exception of Callahan for his failure to return a company-issued cell phone which was said to contain top secret information regarding Borgata’s high-rollers. Borgata claimed that Callahan refused to return the phone even after he had resigned from his post at their casino.

Callahan worked with Borgata’s highest-level customers who spent around $1.5M-$4M per visit. Borgata claimed that these clients were worth a collective $25M per year and Ocean was “crippling” their business using the information that Callahan took from Borgata using his cell phone. The case was filed in Nevada because MGM Resorts International, Borgata’s parent company, is located there.

Atlantic City Casinos to Resume Food and Beverage Operations on September 4

View of Atlantic City Beach

Good news for Atlantic City casinos and gambling patrons.

On Tuesday, New Jersey Gov. Phil Murphy signed Executive Order No. 183 which states that food and beverage operations in the state’s casinos may resume operations but at a 25% capacity. The order, which takes effect on Friday, September 4th at 6 am, is expected to boost casino operations during the coming Labor Day weekend.

The move came after New Jersey continues to improve its COVID-19 figures. The state has seen a total of 3,989 COVID-19 positive cases with 245 deaths and 2,697 recoveries as of last Tuesday. However, according to the Atlantic County Division of Public Health, there were no COVID-19 related deaths for a six-day period ending last Tuesday.

Said Gov. Murphy:

“Given the progress we continue to see statewide, and with the proper precautions and limitations in place, I am proud that we can take this step today to allow our restaurants to once again welcome patrons back for indoor dining services.”

A Big Relief

The news came as a big relief to the Atlantic City casino industry which as been reeling since the coronavirus pandemic forced them to shut down for four months beginning March this year. They were allowed to reopen last July but at a limited capacity and without food, drinks, and smoke.

Atlantic City casinos are coming off a three-month period where they suffered an aggregate loss of $112M with the Golden Nugget as the only gambling operator to have a positive result. The negative figure was an 85% decline from their performance for the same quarter in 2019.

Booze and Smoke Now Allowed

Under the Executive Order, casinos will be allowed to serve drinks to its customers on their gaming floors. However, booze must be ordered through a server and guests are prohibited from leaving their seats while consuming their beverages. E.O. 183 also permits gamblers to resume smoking on the gaming floors although casinos are given the option to maintain their smoking bans.

Casinos have been smoke-free since their reopening and while smokers find this decision as a relief, those who advocate smoke-free gambling will most certainly be disappointed, especially since many of them thought that the temporary ban would eventually become permanent.

The legislation also allows the operation of “indoor performance-based entertainment centers” but subject to the 25% capacity limit, a cap of 150 non-staff guests in any single venue, plus health and safety protocols. However, it remains to be seen if the casinos will open their entertainment venues since the income from limited operations may not compensate the cost to produce the shows.

Budget Shortfall Looms in Atlantic City Due to PILOT Bill

View of Atlantic City Beach

The crippling effect of the coronavirus pandemic to Atlantic City’s casinos will have a direct impact in the Garden State’s 2021 budget. That’s because the casinos’ total direct revenue is the basis of their annual payment to the city based on the 2016 PILOT bill.

Under the bill, which was enacted in 2016, casinos make annual payments to the city based on revenue rather than pay property taxes based on property value. Last year, Atlantic City’s casinos had a total revenue of $3.2B and they made a total of $150M payments to the city in 2019.

But with the pandemic halting casino operations for four months starting March 2020 and the imposition of health and safety restrictions that limited gaming operations since they were allowed to reopen, the casinos in Monopoly City are unlikely to duplicate last year’s performance.

Unlikely to Duplicate 2019 Performance

From January to July 2020, Atlantic City’s nine casinos have reported a total gaming revenue of $1.2B. That’s well off the $1.845B they made through the first seven months of 2019. Also, the casinos reported an average revenue increase of 11.48% per month beginning August 2019 to the end of the year.

But with the current restrictions, it’s not expected that they will overperform their previous month’s income and because of that, they are expected to come up very short of last year’s totals. Casino win has been down by more than 58% through July and is not expected to pick up with the prohibitions and restrictions currently in place.

Need For Tangible Solution

The PILOT Bill was passed to put an end to the casinos’ property tax appeals filed before the city. It was seen as a means to stabilize Atlantic City’s tax base. The bill was projected to bring a steady $120M in annual payments from the city’s nine casinos and it had been working before the COVID-19 pandemic struck.

Sen. Chris Brown (R-Atlantic) who voted for the PILOT bill in 2016, recognizes the need to modify the legislation. Assemblyman Vince Mazzeo (D-Atlantic), a prime sponsor of the PILOT bill, recognized the need to do something but noted that the city has to “be careful on how to navigate” through the looming shortfall. Meanwhile, the absence of a tangible solution has made locals fear of an imminent increase in property taxes or a decrease in municipal services.