Atlantic City experiences a season of drought: report states that the casinos in Atlantic City have had a meager summer, with the NJDGE saying that the Gross Gaming Revenue for July went down by over 6%, with losses felt in slot gaming and table games as well. In addition, only 3 of the 9 casinos operating in Atlantic City have gained this summer, with Caesar's and Harrah's particularly feeling the brunt.

Atlantic City, a famous beach town known for its bustling boardwalk and iconic casinos, has long relied on the summer months to drive its economy. Visitors from New Jersey, New York, and Pennsylvania have traditionally flocked to its shores, and the town's nine casinos eagerly anticipate this annual surge in business. However, 2024 has not been the prosperous season that many gaming resorts had hoped for.

The New Jersey Division of Gaming Enforcement reported a significant downturn in land-based casino gross gaming revenue for July of 2024. The numbers revealed that the city's casinos generated only $272.3 million in revenue, representing a 6.1% downturn compared to the same month in 2023. The drop in revenue was driven by declines in both slot machine and table game earnings. Slot wins fell nearly 5% ($207.3 million), while table game revenue plummeted 10%, totaling approximately $65 million.

The decline in July followed a slightly more promising June, where in-person revenue for casinos amounted to $244 million, marking a 1% improvement year-over-year. But despite this modest gain, the combined revenues for June and July 2024 totaled $516.4 million, reflecting a 2.8% downturn compared to the same period in 2023. All in all, the industry experienced a $15.1 million loss over these two months, a concerning trend for the city's casino operators.

The casino sector's losses hit hard

The challenges facing Atlantic City’s casinos were not evenly distributed. For instance, only three of the gaming resorts out of 9 casinos managed to report revenue increases in July. Leading the pack was Hard Rock, which generated $54.6 million in revenue, a 3% increase from the previous year. Hard Rock's growth has continued to erode the dominance of the market leader, Borgata, which saw its in-person Gross Gaming Revenue fall by more than 3% to only $75.9 million.

Two smaller casinos, Resorts and Golden Nugget, also managed to post modest gains. Resorts earned $15.5 million, up by 1.9%, while Golden Nugget brought in $14.1 million, a 0.7% increase. However, the rest of Atlantic City’s casinos struggled to maintain their previous levels of revenue.

Ocean Casino, another prominent player, saw its revenue decline by 3.3%, ending July with $36.5 million. Tropicana faced a 4.2% decrease, generating $23.1 million, while Caesars suffered the most significant drop, with its revenue plummeting by 20% to only $19.9 million.

The sister property of Caesars', Harrah's, experienced even steeper losses, with a 24% decline in revenue, totaling $19.2 million. Bally's, which has long struggled in Atlantic City's competitive casino market, saw its revenue fall by 23%, bringing in just $13.3 million.

iGaming and sports betting provide a crucial lifeline

But while Atlantic City’s in-person gaming revenues declined, the losses were offset by gains in online gaming and sports betting. New Jersey's iGaming sector continues to thrive, with online casinos and mobile apps bringing in nearly $195.4 million in July, a 26% increase from the same month in 2023. These digital platforms, which are operated through partnerships between Atlantic City’s casinos and third-party operators, have become a crucial revenue stream for the industry.

Sports betting also provided a significant boost to the state’s gaming revenue. Retail sportsbooks at the casinos, horse racetracks, and online platforms collectively generated $80 million in July, representing a 31% year-over-year increase.

On the whole, New Jersey's gaming industry reported $547.75 million in revenue for July 2024, an 8% increase from the previous year. Despite the concerns surrounding brick-and-mortar casinos, the chair of the New Jersey Casino Control Commission, James Plousis, expressed optimism about the state's overall gaming industry.

"Atlantic City's total gaming revenue reached its highest level for the month of July in over a decade, thanks to near-record internet gaming win and strong sports wagering revenue," Plousis said in a statement. He attributed the decline in in-person revenue to a challenging calendar. "July's monthly casino win did not keep pace in comparison to recent years, partly due to a calendar with fewer weekend days," Plousis added. Despite the downturn, he noted that July 2024 still ranked as the fifth-best casino win for the month in the past 11 years.

A challenging road ahead

The gaming industry in Atlantic City remains vulnerable to economic uncertainties. Casino operators continue to express concerns about consumer spending as inflationary pressures persist and a presidential election looms on the horizon. The Casino Association of New Jersey, which represents the city's nine resorts, has urged lawmakers in the state to refrain from implementing a ban on indoor smoking. Casino executives argue that such a regulatory change could lead to significant job cuts and further strain an already challenging economic environment.

While the gross gaming revenue experienced a rise in July, the casinos must share a substantial portion of their sportsbook and iGaming revenues with their partners, including major players like FanDuel and DraftKings. This revenue-sharing model further showcases the importance of in-person gaming for the long-term sustainability of Atlantic City's casinos.