How Did Atlantic City Casinos Fair During the First Year of COVID?

The pandemic has harmed many worldwide industries, but land-based gambling was one of the industries expected to take the most significant hit.

Being places that profit from large groups of people that can’t socially distance themselves while being around roulette or blackjack tables, casinos simply couldn't function normally during the peak of the pandemic. In fact, they couldn’t function at all, as many of them were forced to close down.

Atlantic City casinos somehow survived the worst part of the pandemic, but it can’t be said that they were left unscathed. Luckily for them, the recent changes in gambling laws have led to the emergence of legal US online casino sites, which AC casinos benefited from a lot.

New Jersey has legalized almost all forms of gambling, both land-based and online. However, to run an online casino in New Jersey, an operator has to be partnered with a land-based casino in Atlantic City.

This has given AC casinos a chance for an extra flow of revenue, but little did they know that online casinos would be their only hope to keep revenue figures somewhat stable during the better part of 2020 and early 2021.

Drop in Visitor Numbers

While remote gambling softened the blow for Atlantic City casinos, their revenue still dropped significantly in the last 12 months.

The stay-at-home restrictions led to fewer visitors, which is more evident when looking at the total vehicle count recorded by the Atlantic City Expressway. In the 12-month period that ended in January 2021, the vehicle count was one-third lower than it was the year before.

Most casinos reopened during the 2020 summer months, but the numbers were still lower compared to the same months in earlier years.

The Atlantic City International Airport reported an even bigger decline in passenger count during the 12 months ending in January — around 59%. The decline peaked in April 2020, when there were almost no passengers flying into AC.

Revenue Numbers

Atlantic City casinos were closed for a total of 107 days, which naturally had an enormous impact on their yearly numbers. Even when they reopened, the casinos were forced to work with limited capacity. Some games and gaming areas were closed down, and the ones that remained open attracted fewer players than before.

In-person games like video slots, poker, table games, and sportsbooks had a yearly decline of nearly 50%. On the other hand, remote gambling activities recorded an increase of over 91% during that time.

The total industry revenue from March 2018 to February 2019 was $2.94 billion, $2.57 billion of which came from land-based activities. In the following 12-month period, remote gambling revenue nearly doubled as more online casinos appeared, but land-based casinos also increased their revenue numbers to $2.74 billion.

However, the picture was much different in the last 12 months, from March 2020 to February 2021. In that period, the total revenue of the NJ casino industry was $2.66 billion, but only $1.42 billion came from in-person gambling activities, while the remaining $1.24 billion was earned through online and mobile casinos and sportsbooks.

So, whereas remote gambling activities accounted for just around 20% of revenue in the year before, they now cover approximately 45% of total gaming revenue in the state.

With this in mind, we can conclude that the revenue numbers remained stable due to the increase of online gambling options, but the total numbers still took a dip when they were expected to rise in normal circumstances.

Internet gaming became the most dominant form of gaming in New Jersey during the last 12 months of the pandemic. That title used to belong to slot machines, which now account for only 38.1% of gross gaming revenue compared to the 39.9% revenue share of online casinos.

Other forms of gaming also took a dip, including table games (from 21.9% to 14.7%), poker (from 0.8% to 0.3%), and retail sportsbooks (from 0.6% to 0.4%). As expected, online and mobile sportsbooks increased their revenue share compared to a year before, from 3.5% to 6.6% of the total gaming revenue in New Jersey.

Casino Employment

The first year of the pandemic resulted in thousands of jobs lost in Atlantic City’s service sector. Many of the casinos that reopened still have their bars and restaurants closed. Access to table games is limited, meaning fewer jobs for dealers, croupiers, and dedicated casino hosts. Valet parking services also became unavailable, and many of the scheduled entertainment shows got postponed until further notice.

The total casino employment in AC casinos at the beginning of January 2021 was just over 21,000, which is a near 20% decrease compared to the same period last year. The majority of the layoffs were conducted on part-time employees. The number of people considered part-time casino workers dipped from 20% to 15% in the last year.

Atlantic City casinos also suffered from the lack of non-gambling activities. Many of them are home to large meeting and convention centers, and stats suggest that almost 600,000 fewer people attended meetings in AC during the last year, which resulted in a 90% decrease in attendee spendings.

What Does the Future Hold to AC Casinos?

AC casino owners often cited the pandemic as the primary reason for their revenue losses over the last year, which is more than evident. As the number of infected people decreases and the restrictions loosen up, Atlantic City is expected to have the same number of visitors as before.

In the meantime, the casinos can only hope to keep their revenue numbers stable thanks to their online partnerships. There are currently 23 online casinos registered in New Jersey, with more expected to launch soon.

This article does not necessarily reflect the opinions of the editors or the management of EconoTimes