ATLANTIC CITY — Sports betting, online gaming and two new properties are helping push the casino industry toward a revenue benchmark in 2019 it has not reached since before the market began to contract.
Atlantic City’s nine casinos are on pace to eclipse $3 billion in total gaming revenue this year. The industry last reported more than $3 billion in gaming revenue in 2012, when there were 12 casinos and online gambling and sports betting had not yet been introduced. In 2018, Atlantic City’s total gaming revenue was $2.86 billion.
James Plousis, chairman of the state Casino Control Commission, attributed the industry’s success this year to capital investments at nearly every property, as well as a focus on customer service for both new and returning guests.
“All the casinos have upped their game in regards to entertainment and amenities,” Plousis said. “I think all of these things are paying off. We’re trending in the right direction.”
The industry has reported revenue increases for 16 consecutive months, dating to the dual openings of Hard Rock Hotel & Casino Atlantic City and Ocean Casino Resort in June 2018.
Rummy Pandit, executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton University, said the $3 billion revenue milestone was “an achievement and a feat that we need to celebrate.”
“We’ve been positioned (to surpass $3 billion in revenue) for the last few months,” Pandit said. “Despite growing competition and the fact that other areas might have sports betting or online gaming, Atlantic City is becoming a destination resort.”
Through September, the city’s casinos have reported more than $2.46 billion in total gaming revenue, according to data from the state Division of Gaming Enforcement.
The reported revenue — which includes revenue from slot machines, table games, online gaming and sports betting — is 15.8% higher compared to the same period last year.
Online gaming — legalized in 2013 — has contributed more than $339 million in revenue this year, a 57% increase over the first nine months of 2018.
Sports betting was introduced in New Jersey in 2018 and has generated nearly $77 million in revenue for Atlantic City casinos and their online partners thus far in 2019.
“We continued to see gains in sports betting and tourism numbers this summer, with gaming revenue increasing over 16% compared to last summer,” said Steve Callender, president of the Casino Association of New Jersey and senior vice president of operations for the East Region of Tropicana Atlantic City’s parent company, Eldorado Resorts Inc. “We believe this excitement will continue into the fall season as all major sports are in full swing.”
Combined, the two gaming options account for $415.9 million, or 16.8%, of the industry’s total revenue this year.
While online gaming and sports betting have contributed to overall revenue increases, table and slot revenues, or casino win, have declined for the seven properties that were operational before the openings of Hard Rock and Ocean. However, the losses have been offset by the revenue generated from the two newer casinos.
To date, Hard Rock has generated $250 million from table games and slots, while Ocean has reported just shy of $157 million.
Casino win for the entire market through September is up more than 8.5% over the same period last year.
The $3 billion gaming revenue benchmark is also significant for Atlantic City because the city will receive additional payment-in-lieu-of-tax funding. The city will receive an additional $20 million, or nearly $152 million, from the casinos if total gaming revenue surpasses $3 billion this year. However, a crediting mechanism built into the PILOT legislation will negate a significant portion — about $14 million — of that increased revenue since the city will receive nothing in terms of investment alternative tax to pay down debt obligations.
While gaming revenue has steadily increased in Atlantic City, gross operating profits — a widely accepted measure of profitability in the industry — are down 16.8% through the first six months of 2019 compared to the same period last year. This year’s third-quarter results will be released Nov. 22.