Casino gambling in New Jersey has been legal for the past 40 years but the last year and a half has been the worst due to Covid-19.
40 years is a long time for an industry or sector to command the same level of market potential. With gambling in New Jersey getting better with political goodwill, this legacy had been upheld until 2020. The Atlantic City casino scene boasts of 9 gambling establishments but the market has not always been this solid.
There have been several occasions when the government cracked the whip on casinos and all of them were forced into closure. The worst closure however has been the recent Covid-19 inspired closure. Due to serious health concerns, the AC casino industry grinded to a near halt; how would revenue stream in if players could not access their games to play?
Luckily, the market had just been regulated for online gambling and this was dearly embraced. Although the various casino apps operating in this jurisdiction allowed the casinos to keep afloat, the huge losses could not be avoided.
During the last one year when the pandemic has been raging casino profits in AC were a foreign occurrence. As a matter of fact, the market collectively lost 80% in revenue when compared to the previous year. According to New Jersey gambling operators, this loss was quite inevitable; out of the 9 casinos that have an operating base in AC, seven recorded profits even though there was a significant drop from the previous year.
In 2020, the Division of Gaming Enforcement issued a report to indicate that all 9 casinos had total revenue of $117.5 million for the entire year 2020. The revenue collected in 2019 was $594 million so it is obvious that the stakeholders would be concerned. Since the 2020 performance covered months during which social distancing protocols had been enforced, it is safe to say that this was not the best performance manageable by AC casinos.
The figures shared above are gross meaning that there are still taxes, depreciation, interests and others that would chew off quite a huge chunk of the income. Speaking about the casino industry in Atlantic City, the chairman of the New Jersey Casino Control Commission, James Plousis said that 2020 had been the worst year for casino businesses. It is true that by mid-year, the governor of New Jersey had issued a directive to loosen the restrictions for controlling the pandemic but that did not improve the situation.
In fact, people opted to stay indoors rather than risk travel and close interactions with strangers in casinos. Limited amenities, cancelled events and restricted travel are measures that contributed to the bad performance of AC casinos. Those that gave responsible management a try had it working for them because in-person gambling was still happening safely.
The top performer of 2020 was Ocean Casino Resort that managed to post a profit of $21.8 million which was an improvement from the $6.7 million made in 2019. In a recent announcement, the current owners of this casino establishment have informed its players and stakeholders that the owners of Little Caesars pizza chain will be buying the casino. Known as the Ilitch family from Detroit, the new owners of Ocean Casino Resort have interests in hockey, pro baseball and casino business in Michigan.
With an obviously difficult year 2020, Ocean Casino Resort was the only casino in AC that made profits during this pandemic period. According to Ocean’s CEO, Terry Glebocki, 2020 presented the gambling market with some unique challenges but they had a hard working team. He thanked the team for their determination all through the pandemic period because they could have chosen to stay away but they did not.
Now that there is talk of a Covid-19 vaccination, Glebocki hopes that the good luck they enjoyed in 2020 will still work for them in 2021.
The other casinos’ performances
The Tropicana Casino suffered a 78% loss from operations in 2020 which brought in $18.7 million compared to what they had achieved in 2019. Hard Rock Casino also posted losses of 72% from the $10.9 million they had earned in 2020 compared to what they managed in 2019. Another massive loss was reported in the financial records of Caesars that earned $10.4 million in 2020 which was 84% less compared to previous financial period reports.
Other casinos in Atlantic City which reported losses in 2020 were Harrah’s that reported earnings of $8.5 million (more than 90% loss from 2019), Golden Nugget that managed to rake in $7.2 million (74% in losses compared to what was earned in 2019) and the Borgata that posted operating profits of just $650,000 (a drop of 99.7% in profits from what was earned in 2019). Although none of the 8 casinos had good profit postings, the performance of Borgata was extremely poor. This gambling spot opened last after its competitors had been operational for several weeks.
The other two casinos that must feature on this list are Resorts and Bally’s; Resorts losses for 2020 ran to $10.5 million. The casino’s performance in 2019 was an impressive $17.6 million.
The current pending arrangement for Resorts is the process of negotiating an operational arrangement for its AC operations with the Mohegan tribe of Connecticut. Bally’s is another casino that had a bad year in 2020; the casino made $10 million operating loss which is such a shame considering the $27.5 million profit posted for 2019.
What about casinos that had ongoing online operations?
For those casinos that only had their internet entities operating, Resorts digital made a profit of more than $21 million. A relatively new product that received a breath of life from the pandemic, the casino’s performance was epic because the previous year had managed only $8.5 million. Caesars online gaming platform garnered close to $20 million in profits which is 45% more than the casino had posted in 2019. The GNOG casino made a profit of $18.6 million.
For casinos that had other incomes streams besides gambling, 2020 was a bit bearable. Ocean for instance offered their rooms at close to $202 while a night at the Borgata went for $160.
The events of 2020 are long gone and everyone is looking to a bright future ahead. Judging by the excitement that engulfed New Jersey when gambling was regulated, it is only a matter of time until the market springs back.