July 7, 2021
How Did COVID-19 Affect Atlantic City Casinos?
The COVID-19 pandemic has taken a toll on Atlantic City, New Jersey casinos. Here’s a closer look at how individual casinos weathered the storm.
It’s been a bumpy ride over the past year or so as the global COVID-19 pandemic took its toll on all of us, but how did New Jersey’s casino capital fare and what does the future hold for our favorite Atlantic City venues?
Here, we’ll revisit the slew of restrictions the AC casino industry had to endure, take a look at how the months of uncertainty affected operations, and reveal what their plans are for a post-pandemic recovery.
A Raft of Restrictions
Atlantic City casinos struggled with a raft of restrictions, from the complete shutdown of all venues from March 16 to July 2, 2020, to the subsequent ban and later curfew on indoor dining.
Over 100 days of darkness in all of AC’s nine casinos obviously had a significant impact on the city’s economy, but their reopening in early July was not exactly a return to business as usual.
Reopening restrictions involved temperature checks, enforced mask-wearing, the rotation of outside air into establishments 10 times per hour, glass dividers at the tables, and no food or drinks from 10 p.m. until 5 a.m. — all of which had an unsurprisingly detrimental effect.
Indoor capacity was also reduced to just 35% during the initial reopening, which was relaxed to 50% as late as March 2021.
Thankfully, most of the COVID-19 restrictions have recently been lifted or relaxed, with Covid19.nj.gov listing some of their casino protocols as of June 2021 as follows:
- Businesses can open at full capacity indoors and outdoors. Establishments do not need to limit occupancy to a number that ensures all individuals or groups can remain 6 feet apart.
- Under Executive Order No. 242, the State no longer requires face coverings for most indoor public spaces; however, businesses may continue to require face coverings for employees, customers, and guests.
- Social distancing is not required; however, businesses are encouraged to follow CDC safety guidelines and social distancing to save lives and prevent the spread of COVID-19.
- Employees will be screened for fever and COVID-19 symptoms at the beginning of their work shift, and guests will be screened by employees through questions about symptoms and possible contact with COVID-19.
- Dance floors may reopen without social distancing requirements.
- Sanitizer stations will be placed throughout the casino hotel complex.
- Any establishments that serve food or alcohol must comply with the health and safety protocols for indoor and outdoor dining.
- Casinos will adhere to additional cleaning and disinfecting protocols.
Still, it’s been a tough time for the casino industry in Atlantic City, as the figures reveal.
Pandemic Profits Plunged
In a recent report by the Lloyd D. Levenson Institute for Gaming, Hospitality and Tourism (LIGHT) at Stockton University, revenues from in-person gaming at Atlantic City casinos from March 2020 to March 2021 declined by 48% compared to the previous year, based on figures from the state’s Division of Gaming Enforcement.
The NJDGE’s figures indicate that the pandemic resulted in a drop in profits of more than 80%, with 2020’s gross operating profits stated as $117.5 million across the nine AC casinos compared to almost $594 million the previous year.
James Plousis, chair of the New Jersey Casino Control Commission, said “Atlantic City and its casinos endured their most challenging year in history,” but how did each venue fare on an individual basis?
According to the figures, Ocean Casino Resort was the only Atlantic City casino whose profits increased during 2020 from $6.7 million to $21.8 million.
The Tropicana saw a drop in profits of some 78% to $18.7 million, compared to Hard Rock’s 72% fall to $10.9 million, and Caesars’ 84%+ plummet to $10.4 million.
Harrah’s profits dropped more than 90% to $8.5 million, while Golden Nugget took a 74% hit down to $7.2 million.
The three worst hit of the Atlantic City casinos were Borgata, which was the last to reopen in 2020, reporting a profit of just $650,000, down some 99.7%; Resorts, which suffered a $10.5 million loss compared to a $17.6 million profit the previous year; and Bally’s, which also netted losses of $10 million, down from a $27.5 million profit in 2019.
Of course, it wasn’t just the bottom line that was bottomed out because of the pandemic, with employees also suffering the consequences.
Exasperated Employment
The head of Unite Here Local 54, Bob McDevitt, said “The pandemic economy has taken a severe toll on casino workers, especially tipped workers like cocktail servers and bartenders.”
Financial Secretary Treasurer of the organization, Donna DeCaprio, says around 5,000 of their 10,000 members are currently laid off, with many of the rest working reduced hours compared to this time last year.
AC casinos fuel the city’s economy as the biggest employer and taxpayer, as recognized by Atlantic City mayor Marty Small Sr., and with leisure and hospitality accounting for a third of all jobs in the area, according to Steve Calendar, president of the Casino Association of NJ, it comes as no surprise that employment took a major hit.
According to the US Bureau of Labor Statistics, Atlantic City’s unemployment rate is more than triple the national jobless rate of 6.6%, at 18.5% as of October 2020, compared to 7.2% in the previous year.
Atlantic City casino employment dropped 17% to around 22,000 people in October 2020, compared to the previous year, with the more recent figures of a 20% drop in January 2021 compared to last year suggesting that the new food and drink restrictions were responsible for even more job losses.
How did casino patrons respond to the pandemic?
Wary Customers Coming Around
As was to be expected, regular casino-goers over the age of 60 opted to avoid AC venues once they were reopened, but a recent survey by Phil Kening of LIGHT suggests that most people are now ready to make a comeback.
Out of 805 people surveyed from January to mid-February 2021, 58% of respondents said they hadn’t visited Atlantic City casinos since they’d reopened on July 2 because of the pandemic.
Of the 42% that had, 80% said they were very or extremely satisfied with the safety measures that were in place for dining, gambling, and on the Boardwalk, and 82% said they plan to visit again within the next six months, which suggests that the summer of 2021 could see something of a resurgence and a much needed recovery.
“As more people get vaccinated, they’re going to want to take a day trip somewhere, and Atlantic City is the perfect location,” said Jane Bokunewicz, LIGHT coordinator.
Online Gambling Kept Casinos Afloat
Luckily, thanks to the legalization of online gambling in New Jersey in 2013, many of Atlantic City’s casinos had an online operation to fall back on, with some benefiting from an increase in activity and profits due to the pandemic.
According to the LIGHT report, online betting made up around 20% of all gaming revenues before the pandemic, but that increased to 45% over the last 12 months, with online gaming and sports betting sites seeing a 92% increase in revenue.
In 2020, Resorts Online Casino took $21 million in profits, up from $8.5 million; Caesars Online Casino saw a 45% rise to $20 million; and Golden Nugget‘s online operation brought in $18.6 million.
This increase in revenue from their online operations will come in handy as Atlantic City casinos start the recovery process.
Mending by Spending
According to a report by U.S. News in May 2021, based on information from the Associated Press, the various AC casinos have recently opened their wallets with plans to start renovation works in an effort to reignite the industry.
Hard Rock is said to be spending $20 million on new slots and tables, a new restaurant, a Starbucks, suite renovations, and a beachfront upgrade less than three years after completely redesigning the previously named Trump Taj Mahal, which cost them approximately $500 million.
Ocean Casino Resort is carrying out upgrades to its casino floor and outdoor amenities to the tune of $15 million, while Harrah’s, Caesars, and Tropicana all stand to benefit from renovations totalling $400 million by parent company Caesars Entertainment.
Bally’s will be putting $90 million into upgrades at the Atlantic City casino it took over from Caesars, and Resorts is reportedly making a “significant investment” in terms of their games collection.
Atlantic City Mayor Marty Small Sr. perhaps puts it best: “This isn’t our first rodeo. We always reinvent ourselves. We’re the ultimate comeback story. We’re coming back with a vengeance for 2021.”
Sources:
https://www.inquirer.com/news/atlantic-city-casinos-open-gambling-covid-19-rules-20201208.html
https://nj1015.com/atlantic-city-by-the-numbers-how-the-resort-town-survived-pandemic/
https://nj1015.com/poll-visitors-ready-for-a-return-to-atlantic-city/
https://www.njspotlight.com/video/covid-19s-impact-on-atlantic-citys-casinos-and-economy/
