The state Division of Gaming Enforcement (DGE) this week released its 2024 First Quarter report. The results reflect a mixed bag of trends and conditions in Atlantic City.

“Atlantic City’s net revenue was stable during the first quarter – it grew marginally compared to the same period last year, and it was the best first quarter net revenue figure in six years,” said New Jersey Casino Control Commission Chairman James Plousis in his remarks about the report. “In-person visitation grew during this period, demonstrated by increases in luxury tax, occupancy fees, and occupied hotel rooms.”

Key toplines from Q1:

• $769.9 million: net revenue for casino licensees, 1.8% year-over-year increase 
• $155.4 million: gross operating profit, 8.7% year-over-year decrease 
• 64.8%: hotel occupancy rate, flat over 2023 Q1; in the first three months of 2024, 902,092 total room nights were occupied at an average of $164.20 per night

Top performing casinos for revenue:

• Borgata Hotel Casino & Spa– $178.9 million, down 4.2%
• Hard Rock Hotel & Casino Atlantic City – $133.4 million, up 7%
• Ocean Casino Resort – $116.8 million, up 10%

Most profitable casinos:

• Borgata – $51.7 million, down 10%
• Hard Rock – $26.2 million, up 18.3%
• Ocean Resort – $23.9 million, up 1.2%

Highest occupancy rates:

• Hard Rock – 80.9%
• Caesars Atlantic City Hotel & Casino – 74.8%
• Ocean Resort – 72.8%

“Gross operating profits did not fare as well, recording the third-best figure in six years,” said Plousis. “Well-known increases in the cost of labor as well as goods and services purchased by the Atlantic City casino hotels continue to pressure profits.”

LIGHT analysis

Jane Bokunewicz, faculty director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism (LIGHT), Stockton University School of Business also analyzed the report. She noted that the number of occupied rooms is the largest seen since 2019.

Bokunewicz said that’s consistent with data from the South Jersey Transportation Authority. According to SJTA, vehicle counts passing at the Pleasantville Toll Plaza of the AC Expressway increased 3% year-over-year and 9.5% versus 2022 Q1.

Bokunewicz also echoed Plousis regarding the revenue and profit trends.

“This pattern is also seen in total net revenue for the quarter, which was the highest in recent history – growing nearly 2% year-over-year,” said Bokunewicz. “While the industry might have hoped that this increase in net revenue would translate to an increase in gross operating profit for the period, it was sadly not the case. While the third highest (in dollar value) in the past eight years, first-quarter gross operating profit was down 8.7% in 2024 compared to the same three-month period in 2023.”

She said that a variety of market circumstances can explain this dynamic.

“Including an increase in the cost of doing business, inflation, and a potential shift in the revenue mix to operations like lodging and food & beverage that traditionally have narrower profit margins,” Bokunewicz explained.

$50 billion

This report comes on the heels of other notable developments out of AC and the gaming industry more broadly. A recent impact report showed that the casino industry generated $467 million in tax revenue in 2023. Additionally, the April gaming report highlighted another huge month for internet gaming and sports betting.

In fact, the sports betting handle crossed the $50 billion threshold ($50.87 billion over 71 months) in the most recent report. The milestone makes New Jersey the first state in the post-PASPA (Professional and Amateur Sports Protection Act) era to surpass that figure. The landmark Supreme Court ruling celebrated its six-year anniversary earlier this month.

Looking ahead, Memorial Day Weekend, of course, marks the unofficial kick-off to the busy tourism season. Plousis noted the slew of exciting redevelopment projects happening at the Atlantic City’s casino properties.

“Recent high-quality investments in the casino hotels facilities provide plenty of reasons to visit Atlantic City during the exciting summer season,” said Plousis.