How Golden Nugget Remained Profitable in Atlantic City During the Lockdown

Incredibly, the Golden Nugget was the only Atlantic City casino to turn a profit during the second quarter of 2020, despite Governor Murphy’s lockdown. Combined, all other Atlantic City casinos suffered a loss of $112 million.

Numbers recently released by the New Jersey Division of Gaming Enforcement show that Atlantic City’s nine casinos, plus two online-only operators, generated combined net revenue of $121.4 million during the three months ending June 30. That’s nearly 85% less than what was earned during the second quarter of 2019. Moreover, that loss is worse than the overall US gaming market, which suffered nearly a 79% year-on-year drop, according to the American Gaming Association.

The COVID-19 Shutdown Continues to Affect Atlantic City

Atlantic City’s casinos were ordered to close by Governor Phil Murphy in mid-March and weren’t allowed to reopen until the 4th of July weekend. And then, the casino floors were only allowed to operate at 25% capacity. Furthermore, restaurants were only allowed to serve customers outdoors. Finally, live entertainment has yet to make a comeback in Atlantic City.

Despite being restricted to 25% of capacity, since reopening, Atlantic City casinos generated table game and land-based slot revenue of $147.4 million in July, but that is only slightly more than half of last July’s total.

Those numbers don’t include any revenue from the Borgata, which didn’t reopen until the last week of July; the Borgata delayed its reopening due to the state ordering the casinos to not offer indoor dining or drinking on the floor.

Also, Atlantic City casinos are serving a younger crowd than before the shutdown; that’s understandable since the risks associated with COVID-19 are more serious to older individuals. Unfortunately, the casinos have not been allowed to reopen the nightclubs, concert halls, and other non-gambling activities, which have traditionally been a big draw for younger Atlantic City visitors.

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Poor Q2 in Atlantic City

The forced shutdown of the casinos meant that the second-quarter revenue was generated solely through online casino and sports betting apps and websites.

The Borgata online casino led the second-quarter revenue with a little less than $31 million, followed by the Golden Nugget online casino, with just $25.7 million. Caesars Interactive Entertainment came in a distant third, with only $19 million in second-quarter revenue.

As for the second-quarter total, the nine Atlantic City casinos posted a loss of $112 million, compared to a $159.2 million gross operating profit in the second quarter of 2019.

The Golden Nugget was the only Atlantic City casino to turn a profit, and even then, the Golden Nugget earned just a little more than at $3 million. This was due not only to the popularity of the Golden Nugget online casino, but also to a record number of retail gamblers.

Caesars Interactive Entertainment and Resorts Casino’s Resorts Digital online casino each reported larger profits of $7.7 million and $5.7 million, respectively.

Unfortunately, the Borgata’s market-high revenue didn’t save it from a loss of more than $40 million. Hard Rock Atlantic City suffered the second-biggest loss, losing $18.3 million while Harrah’s came in third, losing more than $15 million.

For the first six months of 2020, market revenue at the casinos was down 52% to $718.6 million. The combined losses totaled $82.4 million compared to nearly $245 million in gross operating profit in the first quarter of 2019.

Golden Nugget Comes Out a Winner

The Golden Nugget’s gross gaming revenues of $28.2 million was an impressive 85% increase over the $15.3 million during the same period last year. Net revenue increased 78% to $24.8 million, compared to last year’s $13.9 million during the same period.

The Golden Nugget also achieved an operating income of $8.5 million compared to $4.9 million in the second quarter of last year, for a 74% increase.

Thomas Winter, the Golden Nugget’s Senior Vice President and General Manager, said, “Our second quarter this year beat our target. It was supported by record player activity and an increased average revenue per user. Our online casino has remained strong in July and August, and we’re confident that we’ll exceed our forecasted revenue and operating income in New Jersey for 2020.”

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