Atlantic City Casinos — Especially Ocean — Rebound In Q3

With widespread news of a number of COVID-19 vaccines pending release in the next 30 to 90 days, and with Atlantic City casinos still open — albeit at reduced capacity — there now is legitimate hope that the second quarter of 2020 will stand uncontested as the industry’s nadir.

The New Jersey Division of Gaming Enforcement on Monday released third quarter figures showing gross operating profits for Atlantic City casinos of $150.5 million.

That represents a decrease of 37.2% compared to the same quarter in 2019, but the reopening of the casinos on July 4 weekend allowed for a big bump up from the gross operating loss of $112 million in that pandemic-created dormant second quarter of 2020.

All but one casino experienced a decline in profits in the third quarter compared to the same period in 2019.

Ocean stands alone

That dramatic exception was Ocean Casino Resort, which jumped from $10.2 million in gross profits — eighth place of nine casinos — to $24.4 million. The latter figure beat all rivals.

Hard Rock, at $20.9 million, placed second as it and Ocean, both of which opened in mid-2018, continue to snag market share from their grizzled rivals age 17 and over.

The most stunning number — at least at first glance — is Borgata’s industry-low $2.3 million in profits. A year earlier, Borgata was on its customary top perch with $69.9 million in quarterly profits.

Some of the decline comes from Borgata giving all of its rivals a three-week head start with a late July reopening in an attempt to ensure that the iconic brand could once again welcome guests at a traditionally high standard.

But even so, Borgata’s decline rate was more than double any of those rivals.

Bally’s — the longtime Caesars Entertainment casino that is now owned by Twin River, which almost immediately changed its corporate name to Bally’s — had the second-best margin with a decline in profits of just 8.3% to $13 million.

Tropicana, which has now replaced Bally’s in the Caesars Entertainment casino stable in Atlantic City that includes Caesars and Harrah’s, had the second-largest dropoff of 43.8%.

Looking at the entire first nine months of 2020, Ocean is again a winner. After being the only casino to lose money in that same period in 2019, Ocean has bounced back to record $12 million in profits this year.

But that doesn’t lead the pack, which features Golden Nugget at $26.5 million and Tropicana at $13.5 million. On the other end of the spectrum is venerable Resorts, which has lost $8.3 million, and Borgata, checking in at an industry-worst $15.3 million in losses.

Profits so far in 2020 are down a grim 85.9% versus the first nine months of 2019.

Hotel numbers take a tumble

The rate of occupancy in Atlantic City casino hotels tends to be similar enough to barely rate a mention in reviews of quarterly reports.

But the third quarter of 2020 is a different story.

Ocean once again crushed the field, with both a huge lead in average room rate at $246 and a staggering 97.2% occupancy rate at those prices.

The industry overall had an average room rate of $159.11 with an occupancy rate of 72.9%.

On the other end of the spectrum, both Borgata, which received an average of $176.65 per room in the quarter, and Golden Nugget, at $193.02, filled fewer than half their rooms in the quarter, an almost unheard of occurrence.

In the third quarter of 2019, by contrast, every casino checked in with occupancy rates of over 80%.

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