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The May 2022 Atlantic City casino figures released last week by the New Jersey Division of Gaming Enforcement suggest that the industry is fully back on its feet. But Jane Bokunewicz, faculty director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism (LIGHT) at the Stockton University School of Business, isn’t so sure.
“Inflation may be beginning to impact in-person gaming revenues,” Bokunewicz said in a statement. “Brick-and-mortar gross gaming revenue totals for the month, expected to improve [over the April figure of $235.3 million], were effectively flat at $233 million, down less than 1%. Brick-and-mortar revenue for the month did improve over last year ($213.1 million) by 9.3% and improved 4.5% over pre-pandemic May 2019 ($222.9 million).
“In keeping with a typical seasonal increase in visitation to Atlantic City and its casinos, internet gaming revenues for the month were effectively flat at $136 million compared to [April 2022 revenue of] $136.9 million. We may see a flattening, if not a small decline, in internet gaming revenues throughout the summer as patrons shift their gaming behavior to take advantage of the city’s in-person offerings.
“Inflation, and continued increases in gas prices, may be starting to impact visitor behavior,” Bokunewicz added. “People, still eager to get away, may consider Atlantic City with its beach, boardwalk, fine dining, entertainment, and casinos an attractive choice for something closer to home. However, when they get here, they may have less money to spend.”
The balance between brick-and-mortar and online casino appeal is an intriguing one, to the extent that there is overlap among consumers. Atlantic City casino executives have stressed that the state’s lumping in of the two revenue streams is misleading in that at least two-thirds of online casino revenue is retained by each casino’s online partners.
Because of that, the state legislature in December passed a bill, which Gov. Phil Murphy quickly signed into law, that removed online casino and mobile sports betting revenue from the gross gaming revenue figure that sets each casino’s PILOT — or payment-in-lieu-of-taxes — that is owed to the city, Atlantic County, and the state. County officials, however, have won a preliminary legal ruling that the new law violated the terms of a 2018 consent order between the state and Atlantic County — potentially leading to a monetary settlement for the county.
Without such a settlement, county officials have estimated that the change in the law could cost the county $15 million to $26 million over the next five years.
The brick-and-mortar casinos, meanwhile, have ramped up their offerings to visitors this summer.
Caesars Entertainment, which owns three Atlantic City casinos, is spending $400 million on upgrades — half of that going to the venerable Caesars property on the Boardwalk and the rest going to Tropicana and to the Harrah’s site in the Marina District. Fans of the reality TV show Hell’s Kitchen may want to visit Caesars to see the first East Coast restaurant with that name, and a Nobu restaurant also will be featured there.
Bally’s, which adjoins Caesars but now is a separately owned business, has spent $100 million as well to open an indoor/outdoor beer garden called “The Yard,” a Carousel Bar, a revamped lobby, and — like Caesars — more than 700 room upgrades. And one of the most intriguing new offerings in Atlantic City is “Experience Beyond Van Gogh” at Hard Rock from July 8-Aug. 28. The more than 30,000-square-foot space will “breathe new life into Van Gogh’s artworks,” according to the casino.
Meanwhile, celebrity chef Bobby Flay and his “Bobby’s Burgers” are back in Atlantic City, this time at Harrah’s, which, like Caesars and Bally’s, has renovated numerous hotel rooms. Not to be outdone, Resorts, the city’s first casino when it opened in 1978, has debuted a pop-up bar called “The Coral Lounge,” while more than 400 new slot machines have been added to the casino floor. A fully renovated pool deck will open sometime in July.
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