Gaming | US: Atlantic City casino revenue up, but newbies hurt others

People walking on the boardwalk in Atlantic City

Two reopened casinos and half a year of sports betting helped push Atlantic City’s casino revenue up 7.5 percent in 2018 to nearly USD2.86 billion, state gambling regulators said yesterday [Macau time].

But the news was bad for most of the casinos that existed before the Hard Rock and Ocean Resort casinos opened in June. Of those seven casinos, six won less in 2018 than they had in 2017, the latest of several recent indications that concerns about whether Atlantic City was re-expanding its market to an unsustainable size were valid.

Sports betting saw the casinos and two racetracks take in $1.24 billion since the first wagers were taken in June. For the less than six months that sports betting was legal last year, it generated just over $94 million in revenue for casinos and tracks. The state got $10.4 million in sports betting taxes.

Ocean Resort is the former Revel, which closed in 2014; Hard Rock is the former Trump Taj Mahal, which closed two years later. Both reopened the same day last year, June 27.

After a brutal stretch that saw five casinos shut down between 2014 and 2016, Atlantic City had been doing reasonably well as a slimmed-down market with less competition and a boost from internet gambling. Increased competition from casinos in neighboring states including Pennsylvania and New York cannibalized Atlantic City’s casino revenue, helping lead to the shut downs.

When plans were announced for Hard Rock and Ocean Resort to open, elation about the restored jobs, tax revenue and additional weekend hotel rooms was tempered by concern that Atlantic City might be making the same mistake twice in having more casinos than the market can support.

James Plousis, chairman of the New Jersey Casino Control Commission, noted that 2018 was the third straight year that Atlantic City’s gambling revenue increased. But he did note the impact on the older casinos from the arrival of the two newcomers.

“While the city had a good year, market adjustments from competition occurred and will continue into 2019,” he said in a news release. “The continuing strength of internet gaming plus a growing sports wagering market will provide the industry with tools to compete.”

Of Atlantic City’s seven casinos that operated before the two new additions last year, only the Golden Nugget showed a revenue increase for the year. It was up 13.7 percent to $327.8 million.

Even the Borgata, Atlantic City’s perennial market leader, saw its casino revenue decline in 2018. It was down 4 percent to $771.1 million.

Tropicana was down 2.5 percent to nearly $381 million, but it remained the city’s No. 2 casino in terms of gambling revenue.

Resorts was down 3.3 percent to $184.2 million; Harrah’s was down 8.4 percent to almost $333 million; Bally’s was down 9.1 percent to nearly $192 million, and Caesars was down 13.5 percent to $281.3 million.

Hard Rock won $166.7 million from late June through the end of the year, while Ocean Resort won $101.1 million during that same period.

Ocean Resort changed hands last week, with an as-yet unannounced company assuming a majority ownership stake in it in return for making a $70 million investment to help keep it running. The ownership change was widely seen as another indication that the market was not ready for the kind of expansion it underwent last summer.

Internet gambling took in nearly $300 million last year, an increase of 21.6 percent over 2017 and one of the true bright spots for New Jersey’s gambling market. Of the two internet-only gambling entities in the state, Resorts Digital was up 76.3 percent to $75.7 million, and Caesars Interactive-NJ was up 5.9 percent to $45.5 million. The Golden Nugget won $104 million online last year, about twice what its nearest competitor, the Borgata, did.

Among racetracks offering sports betting, the Meadowlands earned $31.3 million in sports betting revenue, and Monmouth Park earned $12.4 million. Wayne Parry, Atlantic City, AP