Atlantic City casinos are having a mild start to 2023.
New data released by the New Jersey Division of Gaming Enforcement (DGE) shows the nine New Jersey casinos collectively posted net revenue of $756.6 million, up 4.6% compared to Q1 of 2022.
However, gross operating profits (GOP) are down nearly 15% compared to Q1 last year.
Higher wages cutting into Q1 operating profits
For the first three months of 2023, AC casinos reported a Q1 gross operating profit of $135.4 million, down from the $159 million casinos saw in Q1 of 2022.
According to James Plousis, chairman of the New Jersey Casino Control Commission, the decline in revenue stems from several factors, including higher costs and higher wages they agreed to pay casino workers.
Plousis told the Associated Press:
“Compared to the first quarter last year, the casino hotels are employing more people and a progressive labor agreement was reached. These steps are emblematic of an industry that is preparing for growth and success.”
Despite operating profits being down, the hotel occupancy rate hovered at 65.2%, up 2.1 percentage points compared to Q1 of 2022.
Q1 numbers still strong for AC casinos
As for operator net revenue, only Hard Rock Casino saw a decrease in net revenue compared to the same period last year. For the first quarter, Hard Rock reported net revenue of $124.7 million, down from the $130.4 million in Q1 last year.
Bally’s AC saw a significant shift in its gross operating profit posting $88,000, up from the $6.8 million hole it was in last year.
Gross operating profits:
- Ocean Resort: $23.6 million, up 27.6%
- Harrah’s: $19.2 million, up 21.2%
- Bally’s AC: $88,000, up 101.3%
- Bally’s AC: $44 million, up 40.3%
- Ocean Resort: $106.1 million, up 20.1%
- Borgata: $187 million, up 14.8%
- Hard Rock: $125 million, down 4.4%
On the online gambling side, Resorts Digital saw a 5.9% increase in gross operating profit to begin Q1. The New Jersey online casino generated $7.9 million, compared to $7.5 million in 2022.
Online gambling license holders GOP:
- Caesars Interactive: $6.8 million, down 13.2%
- Resorts Digital: $7.9 million, up 5.9%