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September 22, 2018

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Atlantic City casino earnings up 1.6 percent in 2nd quarter

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Wayne Parry / AP

This July 11, 2014, aerial photo shows the Atlantic City, N.J., beachfront with many of its Boardwalk casinos.

ATLANTIC CITY, N.J. — Atlantic City's casinos saw their second-quarter earnings increase by 1.6 percent compared with the same period in 2017.

Figures released Wednesday by the New Jersey Division of Gaming Enforcement show the casinos reported a gross operating profit of $171.4 million in the second quarter.

Regulators had initially reported that profits were down, but later corrected themselves.

The biggest decline was seen at the Borgata, which saw its operating profit decline by 20.6 percent to just under $53 million, which was still the largest profit — by far — in Atlantic City.

The largest increase came at Resorts, whose profit was up nearly 64 percent to more than $9 million.

Gross operating profit reflects earnings before interest, taxes, depreciation, and other charges and is a widely-accepted measure of profitability in the Atlantic City gambling industry.

The numbers were closely watched in the industry because they were the last quarterly earnings that were largely free of the impact of the two new casinos that reopened in Atlantic City this year. Hard Rock and the Ocean Resort Casino both opened on June 27, and were minimally reflected in this quarter's earnings.

"These numbers are an improvement from the first quarter and that is a positive sign in light of the new competition that was entering the market," said James Plousis, chairman of the New Jersey Casino Control Commission. "I remain optimistic that the addition of sports betting, new amenities and entertainment will continue to expand the industry."

Harrah's profit of $31.5 million was up 20.2 percent from the second quarter of 2017; Caesars profit of $24.6 million was down 4.6 percent, and the Golden Nugget's $14.2 million profit was up nearly 32 percent.

Bally's profit of $11.7 million was up 2.7 percent and Tropicana's profit of $25.2 million was up over 34 percent.

Among internet-only entities, Caesars Interactive NJ reported an operating profit of $2.9 million, up more than 40 percent from a year ago. Resorts Digital reported an operating profit of $391,000, which was down from an operating profit of $1.3 million a year ago.

Atlantic City's two newly reopened casinos reported their earnings for the last three days of the quarter. The Ocean Resort Casino, the former Revel property, reported a gross operating profit of $860,000, while Hard Rock, the former Trump Taj Mahal, reported an operating loss of $2.1 million.

This quarter's earnings numbers were affected by a change in financial reporting requirements. A line of revenue that used to be reported as "promotional expenses" is now required to be reported as a reduction to "casino revenue." These changes were taken into account when regulators calculated earnings comparisons with those of a year ago.

For the first half of 2018, the casinos reported a collective gross operating profit of $294.4 million, a decrease of 4.6 percent from the same period last year.