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Atlantic City's casinos certainly look like they're doing well, reporting third-quarter operating profits that jumped 12.5% from last year, for a collective profit of $239 million. Helped by two new casinos that opened last year, the New Jersey seaside resort looks like it is doing better than it has in years.
Yet looks can be deceiving. Although all nine casinos were profitable for the period, only six saw their operating profits increase, and year-to-date profits are down 4.5%. While the casinos appear to be getting healthier, Atlantic City isn't out of the woods yet. It's been down this road before, and the end result has been ugly.
The nine casinos are the most the city has had since 2014, when a dozen casinos dotted the Jersey shoreline. But in quick succession that year, five of them declared bankruptcy or otherwise shut down.
Unlike Las Vegas, which has gone through its own rough patches over the years but always seems to bounce back stronger, Atlantic City never seems able to attain its former glory. Part of the problem is it's not a destination location in the same way other major gambling cities are; it's more of a day trip.
It also has a reputation as a crime-ridden city. While Atlantic City historically has been highly impoverished, and the crime rate in 2018 was greater than nearly 90% of all U.S. cities, that was actually 61% lower than the year before. Thefts are relatively low, too, but as one former New Jersey governor quipped, "There's nothing to steal."
Still, you really don't want to wander too far off the famed Atlantic City Boardwalk to go exploring, since it largely remains a gritty, run-down area.
The city's biggest and best performing casino is the Borgata, owned by MGM Resorts (NYSE:MGM). It isn't even located on the Boardwalk, but rather at the marina. The Borgata reported the biggest profit in the third quarter, a 10.6% rise to $69.9 million, but the two casinos that opened their doors last year, Hard Rock Atlantic City and Ocean Casino Resort, had the best gains, with profits tripling for Hard Rock to $24 million and a 1,600% increase for Ocean Casino to $10 million.
Yet therein lies the worry. Last year's results were weighed down by the openings and the expenses incurred in marketing the new resorts, so this year's gains are getting magnified. And though it's not completely a zero-sum situation, Hard Rock and Ocean Casino do seem to be benefiting at the expense of some of their rivals.
Atlantic City's casinos certainly look like they're doing well, reporting third-quarter operating profits that jumped 12.5% from last year, for a collective profit of $239 million. Helped by two new casinos that opened last year, the New Jersey seaside resort looks like it is doing better than it has in years.
Yet looks can be deceiving. Although all nine casinos were profitable for the period, only six saw their operating profits increase, and year-to-date profits are down 4.5%. While the casinos appear to be getting healthier, Atlantic City isn't out of the woods yet. It's been down this road before, and the end result has been ugly.
The nine casinos are the most the city has had since 2014, when a dozen casinos dotted the Jersey shoreline. But in quick succession that year, five of them declared bankruptcy or otherwise shut down.
Unlike Las Vegas, which has gone through its own rough patches over the years but always seems to bounce back stronger, Atlantic City never seems able to attain its former glory. Part of the problem is it's not a destination location in the same way other major gambling cities are; it's more of a day trip.
It also has a reputation as a crime-ridden city. While Atlantic City historically has been highly impoverished, and the crime rate in 2018 was greater than nearly 90% of all U.S. cities, that was actually 61% lower than the year before. Thefts are relatively low, too, but as one former New Jersey governor quipped, "There's nothing to steal."
Still, you really don't want to wander too far off the famed Atlantic City Boardwalk to go exploring, since it largely remains a gritty, run-down area.
The city's biggest and best performing casino is the Borgata, owned by MGM Resorts (NYSE:MGM). It isn't even located on the Boardwalk, but rather at the marina. The Borgata reported the biggest profit in the third quarter, a 10.6% rise to $69.9 million, but the two casinos that opened their doors last year, Hard Rock Atlantic City and Ocean Casino Resort, had the best gains, with profits tripling for Hard Rock to $24 million and a 1,600% increase for Ocean Casino to $10 million.
Yet therein lies the worry. Last year's results were weighed down by the openings and the expenses incurred in marketing the new resorts, so this year's gains are getting magnified. And though it's not completely a zero-sum situation, Hard Rock and Ocean Casino do seem to be benefiting at the expense of some of their rivals.
