The fourth quarter of 2020 and the entire year was tough on casinos and hotels in New Jersey as the coronavirus pandemic shut down or limited casinos for much of the year. But the state is beginning to turn the corner with vaccines being implemented on a daily basis.
In the fourth-quarter report issued by the New Jersey Division of Gaming Enforcement on Friday, the nine Atlantic City casinos collectively posted $117.5 million in gross operating profits in 2020 — down from nearly $594 million a year earlier, about an 80% drop. But COVID-19 forced casinos to close for 3½ months, and limited their operations with capacity and restaurant/bar restrictions even after reopening.
Gross operating profit (earnings before interest, taxes, depreciation and amortization, also referred to as EBITDA), reflects profitability.
For the fourth quarter of 2020, Atlantic City’s casinos reported a collective gross operating profit of $57.8 million, down over 53% from 2019, according to the report.
Ocean Casino Shows Increase
Ocean Casino Resort posted the largest operating profit at $21.8 million, up from $6.7 million in 2019. The Ilitch family of Detroit — which owns the Little Caesars pizza chain, the Detroit Tigers (MLB), Detroit Red Wings (NHL) and a Detroit casino (Motor City), is buying half of the Ocean Casino, according to a news release.
Ocean was the lone Atlantic City casino to increase its profits during the pandemic year. They also had the most expensive average hotel room rate in Atlantic City last year at nearly $202 per night.
The Tropicana earned $18.7 million, down more than 78% from a year earlier. Hard Rock earned $10.9 million, down close to 72%, and Caesars earned $10.4 million, down more than 84%.
Other losses included: Harrah’s earned $8.5 million, down more than 90%; Golden Nugget earned $7.2 million, down nearly 74%, and the Borgata - the last casino to reopen last year — posted an operating profit of just $650,000 for the year, down a whopping 99.7% from 2019.
Bally’s had a $10 million operating loss, compared to a $27.5 million profit in 2019. Resorts, which had a profit of $17.6 million in 2019, had an operating loss of $10.5 million.
Internet Gaming Thrives
Internet-only companies saw increases throughout as more bettors resorted to online gaming, rather than traveling to casinos during the pandemic.
Resorts Digital had an operating profit of more than $21 million, up from $8.5 million in 2019.
Caesars Interactive had a profit of nearly $20 million, up more than 45%, while Golden Nugget Online Gaming, which was spun off last year, showed a profit of $18.6 million.
The hotel occupancy rate in the industry’s casino hotels for the three months ended December 2020 was 46.3% and the occupancy rate for the 12 months ended December 2020 was 61.7%. Casino hotels were closed on March 16, 2020, and began to reopen on July 2.