Atlantic City’s nine casinos generated US$150.5m in the third quarter of 2020, representing a 37.2 per cent decline in operating profits compared to 2019’s third quarter.
Whilst showing an improvement quarter-to-quarter, operating profit for the year so far is down by 86 per cent to $68m. Only one casino, the Ocean Casino Resort, increased its operating profit in the third quarter, from $10.2m in 2019 to $24.4m this year.
Jane Bokunewicz, coordinator of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton University, said that under the current limitations, casinos are unable to ‘operate profitably.’
“The current public health crisis has both suppressed consumer demand for brick & mortar casino gaming and related amenities, and increased the costs of operating these services,” she explained. “This is a devastating equation for casino operators and their employees as evidenced by the 37 per cent drop in gross operating profit for the quarter.”
“By maintaining high standards in safety precautions and abiding by state-imposed restrictions on total capacity and food & beverage operations, casino operators have fulfilled their promise to the community to keep the rate of infection on their premises to a minimum,” she added. “This has come at a cost to their ability to operate profitably, and a slow return to work for some casino employees.”
Casinos were ordered to shut down on March 16 for nearly four months. Since reopening, visitation has been limited to 25 per cent of capacity with indoor dining and beverage service on the gaming floor not resuming until early September.
The New Jersey Division of Gaming Enforcement said: “During the third quarter 2020, the casinos operated with certain restrictions due to COVID-19. For the first nine months of 2020, Net Revenue was $1.348 billion and the Gross Operating Profit was $68.1m. In light of the casino closures during the 2nd quarter and operating restrictions in the 3rd quarter, the Net Revenue and Gross Operating Profit for the year-to-date period are not comparable to 2019. The occupancy rate in the industry’s casino hotels for the three months ended September 2020 was 72.9 per cent and the occupancy rate for the nine months ended September 2020 was 70.6 per cent. Due to COVID-19 pandemic, the casino hotels were closed on March 16, 2020 and began to reopen on July 2, 2020.”
Casino Control Commission Chairman James Plousis said: “Reopening with prudent restrictions on capacity, limited amenities and entertainment hindered earnings, but allowed for responsible management of the casino hotels, minimising risk and building a foundation for a successful recovery.