ATLANTIC CITY, N.J. (AP) — Atlantic City’s casinos saw their operating profits rise by 5.8% in 2019 compared with a year earlier, according to earnings reports released Thursday.
But part of that was due to big increases in profitability in the online operations of Caesars Entertainment and Resorts. Only two of the seven casinos that operated for all of 2018 increased their profits in 2019: the Borgata, up 1.5% to $209.5 million, and the Golden Nugget, up nearly 5% to nearly $47 million.
Another portion of the increase was due to 2019 being the first full year of operation for the two newest casinos, Hard Rock and the Ocean Casino Resort, both of which incurred significant opening and promotional costs in 2018 that were not repeated a year later.
Hard Rock swung from a $9 million operating loss in the second half of 2018 to an operating profit of $38.5 million for the full year of 2019. In the same period, Ocean swung from an operating loss of nearly $21 million to an operating profit of $6.7 million.
Collectively, the casinos reported a gross operating profit of $613 million for the year, up from $579 million in 2018.
Gross operating profit reflects earnings before interest, taxes, depreciation and other expenses, and is a widely accepted measure of profitability in the Atlantic City gambling industry
A closer look showed a tough year for many individual casinos.
Bally’s saw its operating profits decline by over 31%, to $27.5 million.
Resorts saw its profits decline by 21.7% to $17.6 million, and Harrah’s and Caesars, both owned by Caesars Entertainment, each posted a 16.9% decline in operating profits; Harrah’s earned $90.8 million and Caesars earned $66.2 million.
Tropicana’s profits were down 7.2% to $86.8 million.
Fourth quarter numbers for the casinos showed a strong end to 2019. The casinos posted a collective quarterly operating profit of just over $129 million, up nearly 79% from the fourth quarter of 2018.
The casinos have been shut since March 16, along with nearly every other casino in the country, during the outbreak.
The casinos stand to benefit greatly from a pair of bills introduced this week in the Legislature designed to help them survive the coronavirus outbreak.
The measures would help the casinos by temporarily excusing them from paying some taxes and fees and by giving them three years to repay loans before interest and penalties kick in.
Tax breaks would have to be used to rehire laid off casino workers and new applicants, attract customers to visit casinos, or promote events that would draw visitors to Atlantic City.
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