NJ casinos rebound in Q2 amid reopenings

Daniel J. Munoz//August 24, 2021//

NJ casinos rebound in Q2 amid reopenings

Daniel J. Munoz//August 24, 2021//

Listen to this article

Eight of New Jersey’s nine casinos were profitable in the second quarter of 2021 – which stretched from April to June – as the gaming halls slowly reopened after a year of pandemic closures and limitations.

All told, casino profits were 16% higher in the second quarter of 2021 than the same period in 2019, according to data from the New Jersey Division of Gaming Enforcement, which regulates the state’s casino industry.

As noted by several state officials, the nine casinos had to entirely shutter their brick and mortar operations during the second quarter in 2020 and depend entirely on online and mobile gaming products, complicating any year-over-year comparison.

For the second quarter this year, they made a combined $185.2 million, compared to the $112.5 million in profits from last year’s closures.

Full capacity operations began in May after Gov. Phil Murphy lifted a final bout of COVID-19 restrictions on businesses. Most restrictions for ancillary Atlantic City businesses were also lifted, including mask requirements and capacity limits for retail, entertainment, restaurants, events, conferences and conventions.

Ahead of the summer, and with post-COVID pent-up demand in mind, the casinos are spending hundreds of millions of dollars on new dining, hotel, gambling and entertainment amenities.

“With Atlantic City in the midst of recovery, especially considering where it was one year ago, all of the operators and their employees are to be commended for providing excellent customer experiences, first-class dining and entertainment, and a safe environment,” reads an Aug. 23 statement from James Plousis, who chairs the New Jersey Casino Control Commission.

Only one casino hadn’t yet come out ahead: Bally’s, which is undergoing an ownership change after it was bought out from Caesars Entertainment.

Jane Bokunewicz, Institute Coordinator & Associate Professor of Hospitality, Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton University.

Even still, gross profits for the casinos were the “highest in recent years,” said Jane Bokunewicz, who heads the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton University, which studies the New Jersey casino industry.

“Pent up consumer demand and optimism fueled meaningful gains in second quarter earnings for Atlantic City’s casinos,” she continued.

Nonetheless, the impact of the delta variant on consumer spending at the casinos will be something to keep an eye on.

Hotel occupancy was 70% in the second quarter, trailing the 81.5% occupancy that same time in 2019. Money the casinos made from hotel rooms, food and beverage was nearly $281 million, which fell behind the second quarter of 2019 by 23%.

Borgata posted the highest profits, $40.3 million compared to its $40 million loss in Q2 last year; followed by Tropicana which made $28 million in profits in the second quarter compared to a $12 million loss last year; and Hard Rock which made $26 million, compared to its $18.3 million loss in Q2 2020. Harrah’s made $25 million, compared to a $15 million loss last year.

Even before the pandemic, the lion’s share of the sports wagers and a sizable percentage of regular gambling was done via online and mobile apps, rather than at the state’s brick and mortar casino locations. During COVID-19 closures and restrictions, online and mobile products served as a lifeboat for the state’s casino industry as it rode the vicious financial woes of the pandemic.