Atlantic City Casinos Show Merry Month of May

Caesars Revisit Atlantic City
A general view of atmosphere at HBO & Caesars Revisit in Atlantic City, New Jersey. Michael Loccisano/Getty Images/AFP

The gambling palaces along the Boardwalk showed increases over last May but it is a double-edged sword as union workers are threatening to strike because they are not getting a piece of that growing financial pie.

Casinos Rebounding

The Atlantic City casinos, coupled with race tracks that offer sports betting and online gambling platforms in New Jersey, combined for an impressive $430.6 million profit in May.

This is a 15 percent improvement over May of ’21 but the key metric for casino owners is the in-person gambling profit which still failed to reach pre-pandemic 2019 profit levels.

In-person Gambling Revenue

The reason in-person gambling revenue is so vital to casino operators is that they only keep 30 percent of any online gambling or sports betting profits derived, with the remaining 70 percent earmarked for third-party partners.

Jane Bokunewicz, director of the Lloyd Levenson Institute at Stockton University, specializing in studying the Atlantic City casino industry, said the numbers were solid evidence that the gaming industry in Atlantic City is on the rebound. Yet, the looming threat of a recession gives cause for pause on a complete recovery from the pandemic.

“However, inflation may be beginning to impact in-person gaming revenues,” she said. “Brick-and-mortar gross gaming revenue totals for the month, expected to improve over last month’s $235.3 million, were effectively flat at $233 million, down less than 1%.”

Revenue Hass Assisted with the Health

And with the advent of online casinos and sports betting in New Jersey, the additional revenue has assisted with the overall health of the Atlantic City gaming industry.

James Plousis, chairman of the New Jersey Casino Control Commission, noted that when internet and sports betting is combined with in-person gambling, the total revenue in May 2022 was the highest for that month in over a decade.

“The volume of activity in Atlantic City’s casino hotels has been robust and, coupled with a maturing online gaming business, can be a powerful combination,” Plousis said.

Strike Looming

While the casino operators will insist that the numbers are misleading because too much is being made of the online revenue, in which the casinos only keep 30 percent, the workers are seeing it differently.

The union believes that any additional revenue streams add to the bottom line and they feel like they have earned a piece of that ever-expanding revenue.

Negotiations have been fraught with distrust on both sides and this week the workers voted to allow their union leaders to strike if a suitable new contract cannot be reached by July.

Union’s Crosshairs

The Borgata, Caesars, Tropicana, Harrah’s, and the Hard Rock are the major players in the union’s crosshairs while a “me-too” agreement with Bally’s and the Ocean Casino Resort has given both dispensations, as they have agreed to honor the terms of any new contract agreements with the other casinos.

Union president Bob McDevitt said, “The industry better not take this lightly,” he told a cheering ballroom of union members after the vote. “This is a no (B.S.) thing.”

Union Struck

The union struck for 36 days in 2004 and again in 2016 when the Taj Mahal was targeted in July of that year only to see it shutter operations that October.

The Hard Rock took over that property, which required extensive renovations, and opened its doors in June of 2018.

If an agreement cannot be reached with the unions over the next two weeks, a massive strike is in the offing and the Atlantic City gaming industry will have to recover from another cataclysmic event.