New Jersey Division of Gaming Enforcement (DGE) has released third-quarter financial results and it is a cause for concern. The opening of two new casinos to Atlantic City’s gaming market has lowered the profits even though the net revenue increased by about 18 per cent.
The total gross operating profit in the third quarter is US$213.7 million, which marks a decrease of 15.3 per cent year on year. The casino industry generated more than US$919.9 million in net revenue in the third quarter, significantly higher than the US$781.2 million registered last year.
“The opening of two new casinos in late June plus the advent of sports betting at the same time explains the surge in net revenues in the third quarter and increase in total industry gross gaming win through October,” New Jersey analyst Tony Marino said. “The publicity and media interest accompanying the new casinos and the long-anticipated legalisation of sports betting was intense and came at the perfect time – the beginning of Atlantic City’s historically robust summer season. In other words, the timing could not have been better.”
“If Atlantic City’s past history has taught us to be realistic, we should anticipate that total year-round demand may not be sufficient to keep all nine casinos profitable by 2020 and beyond,” he warned and explained: “Without major infrastructure changes and effective marketing programmes, another round of right-sizing the casino industry is likely in Atlantic City’s future.”