Borgata AC to lay off over 2K employees as COVID tanks casino industry

Daniel J. Munoz//August 31, 2020

Borgata AC to lay off over 2K employees as COVID tanks casino industry

Daniel J. Munoz//August 31, 2020

MGM Resorts International, which owns Borgata Hotel Casino in Atlantic City, plans to lay off 2,295 staff at the South Jersey resort, as the COVID-19 pandemic wrecks the nationwide casino industry.

Their separations are effective Monday, Aug. 31, according to a Friday letter separation from MGM President and Chief Executive Officer Bill Hornbuckle.

Approximately 3,100 Borgata will still be employed, according to an official at MGM. All told, 18,000 previously furloughed MGM U.S. employees, including the 2,295 at Borgata, are being separated from the company.

“I understand the impact this will have on these employees and their families,” Hornbuckle said in the Friday letter. “Nothing pains me more than delivering news like this.”

Should conditions improve for the gambling industry, those employees would be the first to be offered their jobs back, according to the official.

“As amenities become available, indoor dining restrictions are loosened, as we are able to welcome back” our guests and employees, “that is our hope,” this official said.

The nine casinos in Atlantic City were forced to suspend their brick and mortar operations on March 16, only allowed to resume operations on July 2 with 25 percent capacity.

Although online gambling and sports-betting have provided a lifeline to the casinos during the three-month closure, many of them reported triple-digit losses, or close to those levels.

During July – the first month most of the casinos reopened, save for Borgata until late July – the gambling industry reported a steep drop in profits: $264 million, compared to $335 million last year.

Borgata pulled the plug on its initial plans because of the lack of indoor dining, which Murphy reversed course on days before it was set to resume the same day as casinos. All of them, which typically offer food and drink on the casino floor, scrambled to rework their reopenings in order to offer outdoor dining and take-out options.

Only one establishment, Ocean Resort Casino, came out ahead, according to numbers from the New Jersey Division of Gaming Enforcement, which regulates the state’s gambling and sports-betting market.

Sports betting fared well this year, with many patrons desperate for some form of wagering. But with the pandemic throwing the fate of the professional leagues into chaos, including football season, that success remains uncertain.

In the second quarter, which covers April, May and June, the casinos reported $112 million in gross operating profits, compared to $159 million that same time last year. And they reported $121 million in net revenue during those three months this year, compared to $796 million the same time last year.

Casino Control Chairman James Plousis cautioned that the two sets of numbers are not comparable, given the degree to which COVID-19 upended the casino industry and national economy.

“It is also noteworthy that, during this period, the casinos undertook an amazing effort and expense to prepare a safe environment for the return of employees and guests,” he said in an Aug. 24 statement when the numbers were released.

“That critical investment enabled the casinos to begin welcoming back visitors with appropriate limits in July, and started Atlantic City on the road to recovery.”