Atlantic City’s casinos will head into the New Year in a buoyant mood after enjoying a lucrative time of things during 2020.
The latest financial report published by the New Jersey Division of Gaming Enforcement show that the nine casinos located there collectively won nearly $3.3 billion from gamblers last year.
The figures represent a huge turnaround in fortunes for a sector that appeared to be dying on its feet just a few years ago. Read on as we assess the state of the gambling industry in Atlantic City.
Casinos bounce back from troubled spell
Atlantic City’s casinos haven’t won more than $3bn from gamblers since 2012, just a couple of years before the industry in the region suffered major problems.
Five out of the 12 casinos that were open in the city in the middle of the decade were forced to close, with over 11,000 jobs lost between 2014 and 2016.
However, things have improved since then and the growth of NJ’s online casinos does not appear to be having the negative impact many experts feared.
With a cumulative gross operating profit of $484 million during the first three-quarters of 2019, a slight year-on-year decrease, the nine city’s nine casinos remain in rude health.
David Schwartz, a gambling historian with the University of Nevada Las Vegas, believes things are on the up-and-up in Atlantic City.
“The revenue increase is a positive,” he said. “Right now, the industry should be in ‘grow-the-market’ mode rather than seeking to consolidate profits, so a decrease in profits isn’t necessarily the worst news we could get.
“Overall, what Atlantic City needs right now is to improve its image and marketing and become a destination in a crowded North East casino market.”
Diversification the key to continued growth
While some experts had predicted that online gaming would hit the brick-and-mortar casinos hard, the reality appears to be somewhat different.
Most of the casino venues have diversified their offering to ensure that they benefit from other sectors, highlighting the way forward for themselves and similar businesses.
During the third quarter of 2019, almost half of the casinos’ revenue was generated though non-gaming activities.
However, when compared with the near 70% that Las Vegas currently generates, it is clear that there is still scope for further growth in Atlantic City.
Local gaming expert, Rummy Pandit, believes that diversification of services is crucial to continued financial success in the area.
“I anticipate that number is going to continue to grow as Atlantic City books more meetings and conventions and other leisure market segments continue to expand,” he said.
“The product is constantly being refreshed by operators, creating a buzz about Atlantic City. That is further strengthening our position as a destination resort and helps to differentiate us from other locations.”
Atlantic City must be ready for competition
While the current state of play in Atlantic City appears to be healthy, industry experts have warned that the casinos must not rest on their laurels.
With new hotels and casinos opening in nearby regions and sports betting on the rise across the United States, the industry remains in a state of flux.
Gaming consultant, Bob Ambrose, says that building on what was a successful year in 2019 for the casinos is crucial if they are to flourish over the coming months.
“The uptick in revenue this past year from product diversification has helped to stabilise this fragile market temporarily,” he said.
“On the horizon for 2020, the economic-competitive pressures continue from an already oversaturated north-eastern market.”
While Ambrose’s concerns are undoubtedly valid, Atlantic City does have a significant head start on the competition.
Having recorded impressive financial results last year, the area is well-placed to kick-on during 2020 and beyond.