Atlantic City casino profits up 21 percent in 1st 6 months

Markets Associated Press

The city's casinos saw their collective operating profit rise by 21 percent for the first six months of the year in a sign the struggling industry may be stabilizing.

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Figures released Monday by the state Division of Gaming Enforcement show the eight casinos reported a collective second-quarter profit of more than $259 million, compared with $213 million in 2015. The division also reported that operating profits for the gambling halls in the second quarter of the year were up 15 percent, at $152 million, compared with $132 million in the second quarter of 2015.

New Jersey Casino Control Commission Chairman Matt Levinson says the results show that "slowly but surely" profits are increasing and that the profits are the highest for the first six-month period since 2010.

"For the first time in eight years, every single bricks and mortar casino reported positive operating income," Levinson said.

The surviving casinos have been doing better over the past year as they adjust to a smaller market with less competition.

But the gains may prove short-lived.

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Voters in November will decide whether to end Atlantic City's statewide monopoly on casino gambling. A ballot question asks voters to weigh in on allowing casinos in the northern part of the state at two yet-to-be-named locations near New York City.

Already interest groups in favor and opposed to casino expansion are bankrolling ads to persuade voters to support their positions.

Six of the eight casinos reported increased gross operating profits through the second quarter of the year. 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.

The Borgata reported the biggest increase, up 27 percent in the second quarter to $106 million, compared with the same period last year. Resorts reported profits of $5.7 million, up 26 percent compared with last year; Tropicana posted a profit of $17 million, an increase of 25 percent over 2015; Golden Nugget saw a profit of $13.3 million, up 12 percent compared with last year; and Bally's was up to $17 million, or about 8 percent over 2015. Trump Taj Mahal reported profits of $2 million, compared with operating losses of $9.6 million in the second quarter of 2015.

Caesars saw a decline in profits of 0.2 percent compared with 2015 to $36.5 million in the second quarter of 2016. Harrah's profits were down 3 percent to $57 million.

For Internet-only operations Caesars Interactive-NJ posted a second-quarter profit of $5.2 million, compared with $857,000 a year ago. Resorts digital posted a loss of $1.4 million, compared with losses of $3 million in 2015.

The average hotel room cost about $102 for the first six months of the year, with the highest average at the Borgata, $129.46, and the lowest at the Golden Nugget, $77.89.

The occupancy rate in the city's casino hotels for the first half of 2016 was 78.9 percent, up half a percentage point from the same period a year ago.