The Atlantic City Casino Industry is Facing Economic Challenges as the 2023 Profit Report Suggests

Alex Nesterenko
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the ac casino industry is facing economic challenges as the 2023 profit report suggests

The Atlantic City casino industry’s gross operating profits (GOP) have decreased for the second year in a row, despite an increase in net revenues. Considering what has transpired at the Jersey Shore over the last several years, the seeming contradiction makes perfect sense.

The regional gaming industry is declining as a consequence of a number of factors, including slowing growth in the US economy, a declining reputation for Atlantic City as a travel destination, and the rapid expansion of internet gambling in New Jersey.

With the addition of a sizable new labor union contract, growing inflationary expenses, and other factors, the financial difficulties that Atlantic City casinos are experiencing become apparent.

Even worse, there doesn’t seem to be much hope for improvement. In addition to what analysts refer to as “sticky inflation,” the arrival of new casino resorts in New York City and the trend of Atlantic City residents turning to online gaming will make things much more difficult in the years to come.

Net Earnings from Atlantic City Casinos, Broken Down by the Numbers

The NJ Division of Division Gaming Enforcement last week disclosed data indicating that the combined operating earnings of the two online-only licensees and the nine casinos in Atlantic City in 2023 came to around $780.7 million, a 4.1% decrease from the previous year. This follows a 5% YoY decline in the GOP in 2022.

In the last three months of 2023, the 11 licensees’ GOP fell 3.6% from the previous year.

Taking a quick glance at the nine casinos in Atlantic City in 2023, we can see that the market’s overall operating profits decreased by 1.6% while six of the locations had a reduction in GOP YoY. The only sites that increased in GOP last year were Bally’s Atlantic City ($11.1M, +689%), Borgata Hotel Casino & Spa ($226.1M, +1.3%), and Ocean Casino Resort ($117.3M, +21.8%).

The casinos reported a 2.6% GOP rise in the fourth quarter of 2023, ending a run of five straight quarters in which physical casinos had lost money.

For the third year in a row, Atlantic City casinos’ net revenues topped $3 billion. The nine AC casinos’ net revenue for the previous year ($3.23B) increased 2.6% over that of 2022 ($3.15B).

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