The second-quarter revenue reports are in for Atlantic City and the results are less than stellar. The three month time period, with reporting for April, May, and June, is the first time since gambling started back in 1978 that casinos were shut down completely. Because of the closure due to COVID-19, the reports who a 170.4% decrease in gross operating profits when comparing the same time frame in 2019.
Loss of Profits
Atlantic City was left with limited sports betting options at the time as well as online gambling services. Because of the lack of land-based gaming, the casinos in AC saw a $112 million loss. The second quarter in 2019 brought in $159 million in gross operating revenues. James Plousis, the Casino Control Commission Chairman, said that the comparisons are unreasonable due to the pandemic.
Plousis commented on the difference, stating that it is noteworthy that during the period, the casinos took on the effort to shut down and handled the expenses to create a safe environment for players and employees to return.
The casinos in Atlantic City shut down on March 16 after the coronavirus pandemic began sweeping across the United States. The venues were closed for just over 100 days, the longest closure in the history of the industry.
In late June, it was announced that the properties could reopen on July 2. Some casinos worked quickly to take advantage of the Fourth of July holiday weekend, while others waited a bit longer.
Coordinator of the Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism at Stockton University, Jane Bokunewicz, commented on the loss, saying it was not surprising given the circumstances. Some operations like room and dining expenses could be lowered by reduced purchases. However, other expenses continue.
Casinos still have to cover utility costs, to keep the properties comfortable. Some employees remained at work during the closures, which required maintenance, surveillance, and security. Some operators also continued to pay the health care benefits of employees.
Gaming venues also had to deal with cleaning and safety precaution expenses as they prepared to reopen. Revenues from sports betting and online gaming just didn’t add up to enough cash to cover the expenses that took place during the closure.