Atlantic City Q1 casino profits were down due to wage costs rise

Figures released Monday by the New Jersey Division of Gaming Enforcement show the casinos collectively posted an operating profit of $135.4 million in the first three months of 2023, down from the more than $159 million in profits they saw in the first quarter of 2022.

James Plousis, chairman of the New Jersey Casino Control Commission, said the casinos are dealing with higher costs this year, including significantly higher wages they agreed to pay workers including housekeepers, bartenders, beverage servers and porters under a landmark contract reached last summer.

Gross operating profit reflects earnings before interest, taxes, depreciation, and other charges, and is a widely accepted measure of profitability in the Atlantic City casino industry.

"Compared to the first quarter last year, the casino hotels are employing more people and a progressive labor agreement was reached,” Plousis said. “These steps are emblematic of an industry that is preparing for growth and success.”

Mark Giannantonio, president of Resorts casino and of the Casino Association of New Jersey, also attributed the lower earnings to inflation.

Bally's (BALY) swung from a big first quarter loss last year to a meager profit this year. Its $88,000 operating profit was up from a $6.8 million loss a year earlier.

The Ocean Casino Resort's profit was up 27.6%, to $23.6 million; Harrah's saw its profit increase by more than 21%, to $19.2 million; and Caesars' (CZR) profit was up over 7%, to $11.3 million.

Resorts swung from a $527,000 profit in last year's first quarter to a $284,000 loss this year. The Borgata's profit was down over 50%, to $22.8 million; Hard Rock's profit was down 17.5%, to $22.2 million; and Tropicana was down 15.3%, to $16.7 million.

The Golden Nugget had a profit of $4.8 million, down from a $5.6 million profit over the same period last year.

Among internet-only entities, Resorts Digital was up nearly 6%, to just under $8 million, and Caesars Interactive Entertainment NJ was down 13.2%, to $6.8 million.

The Golden Nugget had the lowest-cost average room rental rate in the first quarter, at $113 a night. Ocean had the highest, at $212.

The overall casino hotel occupancy rate for the first quarter was was 65.2%, up 2.1% from a year earlier.

By Wayne Parry