In 2023, Atlantic City casinos witnessed a downturn in their profits, despite the growing popularity of online gambling. The New Jersey Division of Gaming Enforcement reported a combined gross operating profit of $744.7 million for the state’s nine casino properties, marking a 1.6% decline from the previous year. This downturn reflects the challenges faced by the traditional casino industry in adapting to the rapidly changing landscape of gambling, where online platforms are becoming increasingly favored by bettors.
Among the casinos, Resorts Casino experienced the most significant profit drop, plunging by 54.8% from $21 million in 2022 to $9.4 million in 2023. Conversely, Bally’s showed a notable improvement, turning a previous year’s loss into an operating profit of $11.1 million in 2023. These contrasting fortunes highlight the volatile nature of the casino business, where shifts in consumer behavior and operational costs can dramatically impact profitability.
Operational Challenges and iGaming Growth
The decline in profits for Atlantic City casinos is attributed to several factors, including rising operational costs and inflation, which have affected both the casinos’ bottom lines and patrons’ spending habits. Despite these challenges, four out of the nine casinos, including Borgata, Caesars, Ocean Resort, and Bally’s, reported revenue growth. However, others, like Hard Rock, led the downturns, showcasing the uneven impact across different properties.
Simultaneously, iGaming is experiencing rapid growth in New Jersey, setting a new monthly record with $183.3 million in wins in January 2024, up by 19.9% from January 2023. This surge in online gambling revenue contrasts with the slight decrease in land-based casino revenue from the same month last year, indicating a shift in where and how consumers are choosing to gamble.
Employee Concerns and Legislative Challenges
Casino employees have raised concerns about working conditions, particularly regarding exposure to secondhand smoke. A lawsuit has been filed against Governor Phillip Murphy and Health Commissioner Dr. Kaitlin Baston over this issue. Efforts to ban smoking inside casinos have previously failed to gain sufficient legislative support, reflecting the complex balance between employee health concerns and the casinos’ fears of losing customers to competitors in neighboring states where smoking is still allowed.
Looking Ahead: Atlantic City’s Casino Industry
Despite the profit declines and operational challenges, all nine Atlantic City casinos remained profitable in 2023. This resilience underscores the industry’s ability to adapt and survive in a changing economic and regulatory landscape. However, the growth of iGaming and the ongoing debates over smoking regulations and working conditions suggest that Atlantic City’s casinos will need to continue evolving to maintain their profitability and appeal to both traditional and online gamblers.
As the industry navigates these challenges, the future of Atlantic City’s casinos will likely depend on their ability to balance the needs and preferences of their patrons with the well-being of their employees, all while adapting to the competitive pressures of the expanding online gambling market.
