Despite the Taj Mahal casino’s closing in 2016, all eight Atlantic City casinos saw their gross operating profits increase by 7.3 percent. According to the figures released Friday by the state Division Gaming Enforcement the casinos earned a combined profit of more than $587 million.
A Significant Increase for the First Time in Years
In the fourth quarter the total gross profits were $118.1 million, which is a significant increase to the $99.8 million in 2015. This increase is significant enough that many believe could have positive implications for the future. “The results for last year are quite positive, and figures for the fourth quarter are very encouraging for the future,” said Matthew B. Levinson, Chairman and Chief Executive Officer of the Casino Control Commission.
Excluding the Taj Mahal casino, which closed in October, Atlantic City casinos saw a 9 percent profit increase. Part of this is due to the fact that casinos won an extra 1.5 percent from gamblers yesterday, but a more prominent factor is the shift towards nongaming revenue. In the past Atlantic City has established itself as an extremely popular resort city, but in recent years has seen steady revenue declines.
A Shift Towards Nongaming Revenue
Recently a number of big name casinos turned their investments towards the conventions business. Casinos such as the Borgata and Harrah’s have reportedly seen a 23.2 percent increase in conventions, trade shows and meetings held at their venues. This increased traffic may have played a major factor in the increase in revenue these casinos documented in 2016. Convention centers aren’t the only nongaming avenue that these casinos have explored; a number of them have also invested in nightclubs in hopes of bolstering profits.
So far it appears that the investment is paying off and an area that has seen five of its 12 casinos shut down is beginning to regain some ground. The Executive Direcor of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton University, Rummy Pandit, reported that the average rate per occupied hotel room has gone up $4 over the past year. In addition to the nongaming revenue, closing casinos have meant less competition and the combination of these factors have culminated the increase for 2016.
Despite the increase in revenue on the year, people may argue that the Taj Mahal’s closure was an indicator that things aren’t looking up for Atlantic Casinos. The Taj Mahal closed its doors on October 10th due to a labor strike. In the time that it was open in 2016 it saw a $5.5 million loss. However, there is a silver lining: the Taj Mahal was recently purchased by Hard Rock International. So far the plans for reopening have detailed a clear shift to focus on nongaming revenue. This could mean bring a positive change to Atlantic City casinos in the coming y