Atlantic City Land Based Casino Industry Will Take Years To Recover
Atlantic City depends heavily on its land based casino industry to generate jobs, tourism and revenues. The casino industry suffered during the COVID-19 lockdown but things are a lot better now that the casinos are open again and back in business.
Media reports suggest that things are getting better for Atlantic City’s casino industry but that’s not exactly true.
The significant spike in online gambling revenues has boosted overall revenues for big names like the Hard Rock Casino and Bally’s who have online gaming operations in New Jersey.
However, a closer look at the smaller details says otherwise.
Atlantic City casinos are still struggling contrary to the numbers presented by the media. Industry expert Robert Ambrose, a former casino executive, explained that the reason for this misrepresentation is the lack of nuance when presenting how the money is made and how much is directly given to the companies.
Most of the profit made by casinos during and after lockdown came from online gambling and sports betting which continue to boom. The positive reports of the media come from the total revenue reports of the company but fail to properly show how this is split. Almost half or most of the money from these non-traditional gambling methods is split among third-party gaming companies, with the exact ratio depending on their agreement with the casino.
To show you what this means, let us take the example of Resorts Atlantic City. The casino reported gross gaming revenues of $74.8 million which is good but you also need to take into consideration close to $200 million came in from their digital arm Resorts Digital.
The Future Of The Gaming Market And Atlantic City
Jane Bokunewicz who is the director of a branch dedicated for analyzing gaming information at Stockton University said that the shift in the gaming market was inevitable even before the pandemic could hit. Bokunewicz attributes this shift to the diversification of revenue among gaming products which include sports betting, online slots and online casino games. When you break down the numbers, you will see that the total revenue from brick-and-mortar casinos has been declining even before 2019.
To reduce their overhead, Atlantic City casino operators have cut down their workforce. The pandemic forced casinos in Atlantic City to close and then later operate at a lower capacity which meant the demand for labour was less and casino operators could operate with less staff. While Atlantic City casinos are getting back to normal, market analysts predict that it will take another 2 years for the land based casino industry to fully recover.