ATLANTIC CITY, N.J. – Here's a rare instance of Atlantic City's rash of casino closures actually bringing good news to the industry.
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The casinos increased their gross operating profits by 44 percent last year, according to figures released Tuesday, as weaker competitors fell by the wayside and shut down.
Four casinos — The Atlantic Club, Showboat, Revel and Trump Plaza — closed last year. With the partial-year performances of those four included, the city as a whole posted a $341 million operating profit. The eight surviving casinos saw their operating profit increase by more than 12 percent.
"The eight operating casinos reported higher gaming and total revenues last year, as well as increased third party sales and hotel occupancy," said Matt Levinson, chairman of the New Jersey Casino Control Commission. "Seven of the eight reported positive gross operating profits, including three casinos where the profits increased more than 120 percent. Those profits give casinos the capital they need to reinvest in their facilities, expand their attractions, draw new customers, provide a return for investors and, most importantly, gives them the ability to create new jobs for people here."
Atlantic City certainly needs it; the four casinos it lost last year took 8,000 jobs with them. But the surviving casinos are feeling encouraged by what they consider a right-sizing of a market that had too many casinos and not enough customers to fill them.
Two casinos that reported losses of $10 million or more in 2013 — Resorts and the Golden Nugget — posted profits in 2014. The Golden Nugget had the biggest jump, of nearly 144 percent, to a $4.5 million profit. Resorts went from a $12.3 million loss in 2013 to a $2.5 million profit last year, a gain of over 120 percent.
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The Tropicana saw its operating profit soar by more than 125 percent, from $26 million in 2013 to nearly $60 million last year. The Borgata grew its operating profit by more than 30 percent, from $121.6 million in 2013 to $158.4 million last year.
The biggest decline among surviving casinos came at the Trump Taj Mahal, which posted an operating loss of $1.1 million last year after a $20 million operating profit in 2013.
Bally's saw its operating profit slide 32 percent to $22.6 million; Caesars saw its profit fall 14 percent to just under $60 million, and Harrah's saw its operating profit decline by 4.6 percent to $97.4 million.
Among the casinos that closed, the Atlantic Club and Revel both dramatically decreased their operating losses, but it wasn't enough to save them. Trump Plaza, which closed Sept. 16, saw its operating loss swell from $4.7 million in 2013 to $13 million in the 8½ months it operated last year.
The Showboat was still profitable when it shut down — a fact that rankles many laid-off employees — but its operating profit fell from $34 million in 2013 to just under $13 million in the eight months it operated in 2014.
Gross operating profit reflects earnings before interest, taxes, depreciation and other charges, and is a widely accepted measure of profitability in the Atlantic City casino industry.
Wayne Parry can be reached at http://twitter.com/WayneParryAC