Atlantic City Casinos are seeing the highest operating profit margins since 2010. For the last five years, there has been concern over the closing of casinos in Atlantic City leaving only eight out of the 12 open for business. Recent reports however show that less local competition and the introduction of online gambling has led to increased operating profits to the tune of 12.7 percent.
Two of the biggest success stories come from the Resorts and Golden Nugget casinos. The Resorts seems to have right sided with a 12.7 percent increase or $5.7 million. In 2015, Resorts went from a loss of $12.3 million to a profit of $2.3 million, a 120 percent increase. Meanwhile, Golden Nugget, which was the most successful in 2015 making a $4.3 million profit an increase of 144 percent, continued with this trend in the first quarter of 2016 increasing profits to $6.6 million or 9.3 percent.
The Borgata, Tropicana and Bally’s, some of the most well-known hotel and casino staples of Atlantic City, all saw an increase in profits as well. All three experienced a profit increase of 4.5-12.7% this year. To put this into better perspective, the dollar increases were $237.4 million, $102.4 million and $66.5 million respectively.
The climax of the gambling industry in Atlantic City was in 2006 with profits in the range of $5.2 billion. Atlantic City still had the thrill of the boardwalk and its long history of family entertainment then coupled with the excitement of a sort of East Coast Vegas with an ocean view. Within the last decade however the combination of a struggling economy, the closing of four casinos causing the loss of 8,000 jobs and the influx of gambling arenas in other Northeast states such as Pennsylvania, caused a sharp decline in the industry and a great deal of uncertainty about the future of Atlantic City. Now in the early part of 2016, the outlook seems favorable with revenue up by 4.4%.
While most of the remaining eight casinos saw a surprising upward trend in the profit margin, three have actually lost money: Harrah’s, Caesars, and Trump Taj Mahal. Harrah’s saw a decline by 4.3 percent, Caesars by 4.3 percent and the most significant decrease in profit has been Trump Taj Mahal which went from a profit of $20 million in 2013 to a deficit $1.1 million in 2015 and then another decline of 3.4% in 2016 thus far.
The profit success is in part due to the increase in online gambling opportunities. Most of this type of gaming is related to sports betting. This facet of the industry has seen an operating profit of $61.8 million or 29.3 percent. The two gambling modes combined led to a combined total $812.8 million profit margin.
This financial upward trend is allowing these companies to reinvest in order to renovate and update facilities and offer new and different shows and forms of entertainment. With gambling opportunities on the increase in surrounding states, those that remain standing in Atlantic City have to be creative to continue to attract guests.
According to the Press of Atlantic City New Jersey is “the third largest non-tribal casino market in the US.” The town has held steadfast in its reputation as a top Jersey Shore destination in recent history for its gambling opportunities. That pride has proven tried and true for four casinos which in reality is probably all the city’s population can support.
Could this be a sign for positive revitalization of Atlantic City? Only time will tell but this well-known shore town has a long history of entertaining vacationers and locals alike. The casino industry some would argue was the downfall of the wholesome family town while others would say the casinos brought revenue and jobs to not only the city but the state. Either way, one cannot argue with the fact that profits are up and if reinvestment in the industry and the town are the end result then the course is headed in a positive direction.