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Atlantic City Casinos are Experiencing Slow Post-Lockdown Recovery

Atlantic City Casinos are Experiencing Slow Post-Lockdown Recovery

Casinos were shut down for one hundred and eight days since march following the coronavirus pandemic. They were eventually allowed to open on the 2nd of July. An aggregated third-quarter operating profits of the nine Atlantic City casinos showed that profits were down by 37.2 percent (150.5 million), compared to what was achieved last year.

March 16 was the start date of the shutdown and it was all dark inside the doors of those facilities until July 2. The lockdown also affected their second-quarter financials as the combined operating losses of all nine casinos in the city was beyond $112 million.

Even with the re-opening, casinos could not operate freely as some restrictions were still in place. They were all forced to operate at a 25 percent capacity and certain facilities in their establishments could not be utilized. Further constraints also surrounded indoor dining and the hosting of trade shows, conventions, and concerts. At all times, the casinos were never to exceed the 25 percent capacity threshold as instructed by the state.

What many have suspected and anticipated following the shutdown of casinos is that such a measure will take a toll on the land-based casino industry in New Jersey and ultimately adversely affect the state. Many employees have lost their jobs as a result because the number needed for the re-opening will be less than half, as a result of the 25 percent capacity threshold.

Jane Bokunewicz, the Institute Coordinator for Stockton University’s Levenson Institue for Gaming, Hospitality, and Tourism, has come out to say that the effect the shutdown would have on casinos was expected. However, no one knew to what degree these land-based casinos will be affected.

She said, “The current public health crisis has both suppressed consumer demand for bricks and mortar casino gaming and related amenities and increased the cost of operating these services. This is a devastating equation for casino operators and their employees as evidenced by the 37 percent drop in gross operating profit for the quarter.”

Unplanned Expenses

Reports have suggested that only $68 million has been accumulated by all nine Atlantic City casinos as gross operating profit for the first nine months of 2020. That figure equates to about an 86 percent drop in operating profit compared to the same period in 2019.

Hard Rock Hotel and Casino Atlantic City, Borgata Hotel Casino and Spa, Bally’s Atlantic City, and Resorts Casino Hotel have all forked out large amounts of cash to make changes to their facilities. This includes systems to improve air quality and extended employee medical benefits. Personal protective equipment for guests and workers were also made available. These steps that were taken by these casinos to ensure the safety of their workers and guest have left their books in the red.

Chairman of the New Jersey Casino Control Commission, James Plousis, is happy with the results. He stated that the steps are paying dividends as only 251 of the city’s casino employees have been diagnosed with coronavirus since the re-opening of casinos in early July. Excerpts from his statement read, “Re-opening with prudent restrictions on capacity, limited amenities, and entertainment hindered earnings but allowed for responsible management of the casino hotels, minimizing risk and building a foundation for a successful recovery.”