Atlantic City casinos have seen a decline in their earnings for the year 2013. Earnings were down nearly 35% last year. The 12 casinos that operated in 2013 showed a collective gross operating profit of $235 million. In 2012, the operating profit was $360 million. Gross operating profit includes earnings before taxed, interest, depreciation and other charges. It is the accepted measure of profitability amongst the casino industry.
The 35% decline has been a hard hit for Atlantic City. Profits and revenue has declined ever since the opening of Pennsylvania’s first casino in 2006. The saturated casino market in the Northeast has cost New Jersey billions in revenue and many lost jobs.
In 2012, Atlantic City was hit hard by Hurricane Sandy. The hurricane caused many major structural and financial damages. The casinos were closed for roughly a week and lost many customers in the following months as they tried to rebuild their storm stricken homes. With this calamity in 2012 and declining profits the following year, Atlantic City casinos may prepare for a rocky future.
In November 2013, Gov. Chris Christie (New Jersey) signed a legislation allowing internet gambling in the state of New Jersey. The legislation hopes to generate $1 billion for the state’s casino in the first year. This would bring in $150 million in tax revenue which would help balance the state’s budget. Even with internet gambling in New Jersey, gross profit dropped from the previous year. Granted the legislation was passed in late 2013 and only had a little over a month to generate revenue. New Jersey casinos are hopeful the internet gambling business will help bridge the gap with the loss revenue.
The following are the operating profit/loss for each casino:
– Tropicana Casino Resort posted a gross operating profit of $26.5 million
– Borgata Hotel Casino & Spa (NYSE: BYD) posted $121.6 million
– Trump Taj Mahal Casino Resort posted $19.6 million
– Trump Plaza Hotel and Casino had an operating profit of roughly $10 million in 2012 to an operating loss of $4.7 million in 2013
– The Golden Nugget Atlantic City cut its operating loss of $11.4 million in 2012 to $10.4 million last year.
– Harrah’s Resort Atlantic City posted its operating profit of $102.1 million
– Showboat Casino Hotel posted its operating profit of $34 million.
– Bally’s saw its profits fall by more than 45 percent to $33.4 million
– Caesars (NASDAQ: CZR) saw its profits decline by 16 percent to $69.5 million
– Revel Casino Hotel saw its operating loss by 17.4 percent to $130.2 million