The New Jersey Division of Gaming Enforcement recently released its second-quarter results, shedding light on the financial performance of Atlantic City’s casinos and their online affiliates. While the overall net revenue showed an encouraging 14.1% increase compared to the previous year, the gross operating profit experienced a marginal decline of 0.8% year-on-year. Despite this dip, it is worth noting that the gross operating profit surpassed 2019 levels, indicating a general recovery trend in the industry.
Overall Q2 Performance:
In the second quarter of the current year, Atlantic City’s casinos and online partners collectively achieved a gross operating profit of $183.6 million. Although this figure represents a slight 0.8% decrease from the same period in 2021, it is crucial to emphasize that the industry has been making strides toward recovery since 2019.
Net revenue, a key metric reflecting the actual earnings of the licensees, showcased a robust growth of 14.1% year-on-year, totaling $828.8 million. This substantial surge in net revenue indicates that despite the challenges faced by the casinos, customer engagement and spending have shown promising signs of rebounding.
Individual Casino Performances:
While the industry experienced overall growth in net revenue, individual casinos demonstrated mixed results during the second quarter. Out of the nine Atlantic City casinos, four reported lower profits compared to the previous year. One particular establishment, Bally’s, faced the brunt of the challenges and recorded an operating loss of $3.7 million.
Borgata emerged as the top-performing casino, posting an impressive quarterly operating profit of $42.2 million, representing a 4.6% increase from the previous year. Hard Rock and Tropicana also exhibited strong performances, reporting profits of $38 million (up 45.9%) and $30.3 million (up 8.2%) respectively.
On the other hand, Harrah’s, Ocean, Caesars, Golden Nugget, and Resorts encountered declines in their operating profits. These establishments experienced reductions ranging from 8.1% to 23.6% in year-on-year comparisons.
First Half of 2022 Overview:
Zooming out to assess the first six months of 2022, Atlantic City’s casinos showcased impressive growth in both net revenue and gross operating profit. Net revenue reached $1.5 billion, marking a significant 19.9% increase from the same period last year. This upswing in revenue reflects the industry’s resilience and its ability to adapt to changing market conditions.
The gross operating profit amounted to $339.3 million for the first half of 2022, an encouraging 20.9% rise from the previous year. This performance further solidifies the notion of a recovery trend, despite the challenges faced by the casinos.
Occupancy Rate and Outlook:
The report also shed light on the occupancy rate at casino hotels for the three months ended June 2022. The rate stood at 77.4%, indicating a noteworthy 7.4 percentage point increase compared to the same quarter last year. This surge in occupancy highlights the gradual revival of the hospitality sector and tourists’ renewed interest in visiting Atlantic City.
Atlantic City’s casinos and online partners navigated through a challenging second quarter, with a slight decline in gross operating profit. However, the overall net revenue growth of 14.1% and the surpassing of 2019 levels demonstrate the industry’s resilience and recovery. Individual casino performances varied, with some experiencing remarkable growth while others faced challenges. Nonetheless, the overall outlook for the first half of 2022 is promising, showcasing positive trends in net revenue and gross operating profit. As the industry continues to adapt and evolve, it is on a path to regain its momentum and attract visitors eager to experience the excitement of Atlantic City’s entertainment and gaming offerings.