Casinos across Atlantic City saw their revenues decrease by more than 37% between July and September 2020 compared to the same period last year due to the continuing restrictions to curb the spread of the virus.
The Industry is Recovering Slowly
Casinos in Atlantic City posted net revenue of $629.3 million or a 32.3% decrease during the third quarter of 2020, while gross operating profit was down by 37.2% to $150.5 million, according to a report issued by the New Jersey Division of Gaming Enforcement. The losses were due to the continuing operating restrictions due to Covid-19.
The occupancy rate in the industry’s casino hotels in 3Q2020, excluding the full lockdown period, was 72.9% and the occupancy rate for the nine-month period ending in September 2020 was 70.6%, the report says further. Casino hotels were shut down on 16 March 2020 and began reopening four months later.
Ocean Casino Resort was the only licensee to report an operating profit for the quarter ended September 2020 – it gained $24.4 million compared to $10.2 million in the same quarter in 2019, which corresponds to a 138.8% increase year-over-year.
On the other hand, it posted a 2.9% decrease in net revenue, the smallest one among all venues, from $79.9 million last year to $77.6 million in 3Q2020. Borgata, which was the last casino to reopen in Atlantic City, posted the biggest net revenue and gross operating profit losses – 64.9% and 96.6% respectively.
Atlantic City casinos are currently operating in compliance with strict mitigation requirements, including mandatory masks in all public areas, safety protocols for indoor dining, a limited number of players, and social distancing measures, as well as a full ban on smoking and vaping, among many others.
In a comment related to the financial results, Jane Bokunewicz, coordinator of the gambling and tourism institute at Stockton University said that the current public health crisis has diminished consumer demand for in-person gaming and has prompted operational costs.
This is a devastating equation for casino operators and their employees.Jane Bokunewicz, coordinator of the gambling and tourism institute at Stockton University
What is the Situation at National Level?
Data from the American Gaming Association (AGA) says that commercial gaming revenue in the United States for July-September 2020 was $9.04 billion, which is equal to 81% of the sector’s pre-pandemic level in the same period last year. Despite the annual decrease, third-quarter results show a 294% increase compared to the record lows in the previous quarter, when venues were shut down.
On another note, sports betting and iGaming experienced notable gains prompted by the return of many sports events and the legalization of the activity in new markets, such as Colorado, Washington DC, Illinois, and Michigan.
Sports betting brought $352.3 million profit, a record, which was only beaten in Q4 2019 with $374.9 million. At the national level, iGaming profits, non-inclusive of Nevada online poker, were $435.0 million in the third quarter of the year or a 234.2% increase year-over-year.