Less competition has led to higher profits for Atlantic City’s casinos in 2017 — but will it last with two more casinos soon to join the mix?
The seven casinos saw their gross operating profits increase by 22.5 percent last year, to $723 million.
That is good news for the seaside gambling resort, which saw five of its 12 casinos shut down since 2014.
Harrah’s was the only one whose profit declined, down 2.7 percent to $115.8 million. The Borgata had the highest profit at $292 million, up 19.5 percent from 2016.
Gross operating profit reflects earnings before interest, taxes, and other charges, and is a widely-accepted measure of profitability in the Atlantic City casino industry.
Caesars showed a profit of $92 million, also up 19.5 percent from a year ago; Tropicana’s profit was just a shade below $92 million, representing a 71 percent increase over 2016; Bally’s profit was $42.1 million up 8.1 percent; the Golden Nugget had a $40 million profit, up 38.3 percent; and Resorts had a $23.1 million profit, up 23.6 percent.
Among internet-only entities, Resorts Digital swung to a $14 million profit from a $791,000 loss in 2016, and Caesars Interactive-NJ had an $11 million profit, up $12.7 percent.
James Plousis, chairman of the Casino Control Commission, says the numbers show the underlying health of the Atlantic City casino industry.
“It was a very up year,” he said.
He noted that all seven casinos showed an increase in total revenue, adding that hotel occupancy and room rate stats are up as well.
But can the good news last? Much of the improvement in the casinos’ financial picture has to do with the fact that they are operating in s slimmed-down market, with five fewer casinos than there were at the start of 2014.
This summer, two of those shuttered casinos are due to reopen: the former Trump Taj Mahal as Hard Rock, and the former Revel as the Ocean Resort.
“The industry is on the verge of a significant expansion this summer which will create a new array of attractions and attract a lot of additional visitors to the city,” Plousis said. “That expansion may put pressure on the current operators, but I think the industry is well positioned to deal with the new competition.”
Authorities also released fourth-quarter figures for 2017, which saw the seven casinos report a gross operating profit of $161.4 million for the final three months of the year, up 36.5 percent from the same period a year ago.
The Borgata had the most expensive average hotel rooms in 2017, at $133.04; the Golden Nugget had the least expensive at $83.38. The citywide average was $108.35.
Caesars had the highest average occupancy rate at 91 percent; Golden Nugget had the lowest at 77.8 percent.