T
he state Division of Gaming Enforcement reported the nine casinos collectively posted $117.5 million in gross operating profits in 2020. That was down from nearly $594 million a year earlier, before the pandemic forced casinos to close for 3 1/2 months, and limited their operations even after reopening.
Gross operating profit reflects earnings before interest, taxes, depreciation and other expenses, and is a widely accepted measure of profitability in the Atlantic City casino industry.
“Atlantic City and its casinos endured their most challenging year in history,” said James Plousis, chair of the New Jersey Casino Control Commission. Even after being allowed to reopen in July, the casinos’ earnings were limited by travel restrictions, limited amenities, and canceled entertainment, he added.
The Ocean Casino Resort posted the largest operating profit at $21.8 million, up from $6.7 million in 2019. Its owners announced this week that the Ilitch family of Detroit, which owns the Little Caesars pizza chain, pro baseball and hockey teams and a Detroit casino, is buying half of the Ocean casino. Ocean was the only Atlantic City casino to increase its profits during the pandemic year.
The Tropicana earned $18.7 million, but that was down more than 78% from a year earlier. Hard Rock earned $10.9 million, down nearly 72%, and Caesars earned $10.4 million, down more than 84%.
Harrah’s earned $8.5 million, down more than 90%; Golden Nugget earned $7.2 million, down nearly 74%, and the Borgata posted an operating profit of just $650,000 for the year, down 99.7% from 2019. It was the last Atlantic City casino to reopen last year, several weeks after the rest.
Resorts had an operating loss of $10.5 million, compared to a profit of $17.6 million in 2019. Resorts is in the process of extending its management agreement with the Mohegan tribe in Connecticut to manage its Atlantic City casino operations.
Bally’s had a $10 million operating loss, compared to a $27.5 million profit in 2019.
Among internet-only entities, Resorts Digital had an operating profit of over $21 million, up from $8.5 million in 2019. Caesars Interactive Entertainment-NJ had a profit of nearly $20 million, up more than 45%, and Golden Nugget Online Gaming, which was spun off last year, showed an $18.6 million profit.
For the fourth quarter of 2020, whose results also were released Friday, Atlantic City’s casinos reported a collective gross operating profit of $57.8 million, down over 53% from 2019.
Ocean also had the most expensive average hotel room rate in 2020 at nearly $202. The Borgata was a distant second at $160.
Resorts had the lowest average room rate at $101, followed by Hard Rock at $112.
Hotel Occupancy
The occupancy rate in the industry’s casino hotels for the three months ended December 2020
was 46.3% and the occupancy rate for the twelve months ended December 2020 was 61.7%.
Due to COVID-19 pandemic, the casino hotels were closed on March 16, 2020 and began to
reopen on July 2, 2020.