The New Jersey Division of Gaming Enforcement released statistics on Thursday, which show that the collective gross operating profits from the eight remaining casinos at Atlantic City are up by a whopping 40% compared to last year’s numbers.
The collective operating profits from all eight casinos amounted to more than $547 million, with seven of its eight properties showing an increase; The Tropicana, however, was the only casino to suffer a loss.
Gross operating profit reflects earnings before interest, taxes, depreciation and other charges and is a widely accepted measure of profitability for the Atlantic City casino industry.
If the two additional casinos are built, it is widely expected for them to cause severe damage to the market. It will bring an end the large profit margins Atlantic City enjoyed this year, it may even result in the shutdown of two or three other casinos.
The two casinos with extraordinary profits were Resorts, which saw a 525 per cent increase in profits, to $15.6 million and The Golden Nugget, which was also on the rise, with more than a 396 per cent increase to profits, to $22.6 million.
Bally's was also up by nearly 77 per cent, to $39.9 million.
Caesars experienced a smaller but significant profit of 39 per cent, to $83.4 million, Borgata was up by more than 36 per cent, to nearly $216 million and Harrah's was up 26 per cent, to $122 million.
The Trump Taj Mahal, which reported operating losses of $1.1 million in 2014, has announced an operating profit of $3.1 million for 2015.
The Tropicana was the only casino to report a loss of 22 per cent, to $46.4 million.
Internet-only contender, Caesars Interactive-NJ, which reported operating losses of $12.3 million in 2014, reported profits of $4 million last year.
Another internet only entity, Resorts Digital saw its online operating loss go from $1.6 million in 2014 to $6.5 million last year; this is a deterioration of 293 per cent.
Still issues with occupancy rates
Occupancy of hotel rooms at Atlantic City showed an average of 74.1 per cent; Caesars had the highest occupancy rate of 86.6 per cent and the Taj Mahal the lowest of 49.3 per cent.
The average casino hotel room rate was $98.09; the Borgata cost the most with an average rate of $129.06, while Resorts was the cheapest, at $72.81.
Matt Levinson, chairman of the New Jersey Casino Control Commission, said, “Atlantic City's casino industry is alive and quite well. The figures are an indication that the market is stabilizing after several years of turmoil. Every single operator reported a very solid performance for the year.”
Since four out of the twelve Atlantic City casinos shut down in 2014, this has been the first year, where figures have shown profitability. This suggests that the lack of competition has proven worthwhile for the casinos still standing but this celebration could a tad premature, as New Jersey is awaiting a vote from its residents to license two new casinos, in November 2016.