december_2020
In LIGHT of the data.
December 2020 marks the end of perhaps the most challenging year in over forty years of casino gaming in Atlantic City.
While we may never truly know the full impact of COVID-19 on New Jersey’s casino gaming industry in terms of lost jobs, revenue and opportunity, this much is clear. Compared to 2019, year end 2020 New Jersey’s gaming operators realized $643.5 million less in year-end gross gaming revenue.
The brunt of this decline was borne by brick and mortar gaming operations in Atlantic City which earned $833.8 million less in slots revenue (-43.4%) and $321.8 million less in table games revenue (-43.6%) in 2020 than in 2019. When fourth quarter non-gaming revenues are reported this Spring, we expect similar declines in revenue for Food & Beverage and Lodging operations which have historically complemented gaming revenues at these properties. Seven of Atlantic City’s nine casinos reported year-over-year declines - all in double digits. But it could have been worse.
Unlike many gaming jurisdictions across the country, New Jersey has active internet gaming and online sports wagering products. While land-based gaming operations continued to be subject to restrictions which limited operational capacity and consumer volumes, internet based casino gaming and sports wagering continued to serve customers with relatively little disruption (early shutdowns of major league sports, and the cancelation/postponement of games and competitions due to the threat of COVID-19 did disrupt sports wagering). Internet gaming realized $487.6 million more in gross gaming revenue at year-end 2020 (101.0% increase) than 2019, and online sports wagering alone (without retail sportsbooks) generated $49.8 million (46.9%) more in 2020 than in the prior year. These gains in no small way served to off-set significant declines in land-based gaming revenues, but were still not enough to replace the activity lost as a result of the industry’s longest shut down in history from March to July 2020.
As we have said before,the public health crisis of 2020 was a perfect storm for gaming operators who tried to weather a simultaneous increase in operating expenses and decrease in demand for land-based gaming and resort services. Through the remarkable efforts of operators and their determined staffs Atlantic City casinos rallied in the Summer and Fall to create safe and inviting spaces for customers and team members alike. Along with safe and healthy, adaptation and innovation were buzz words for the year which saw the expansion of outdoor dining and the implementation of new technology tools across multiple operational areas.
If any silver lining can be found in the storm clouds of 2020 it is this, gaming hospitality and tourism businesses across our region used the crisis as an opportunity to examine their relationship with consumers and consider ways to serve them better. Crisis has strained the industry, tested the resilience of many businesses, but it has also been the catalyst for significant changes strengthening the industry and positioning it for successful recovery in 2021.
Atlantic City Gaming Win & Total Casino Revenue
Source: N.J. Division of Gaming Enforcement
| Monthly Revenue (Industry, $ In Thousands) |
December 2020 |
% Change from Prior Year | December 2019 | YTD December 2020 | % Change from Prior Year | YTD December 2019 |
|---|---|---|---|---|---|---|
| Total Gaming Win (includes Internet & Sports Wagering) | $275,468 | 1.9% | $270,234 | $ 2,649,194 | -19.5% | $3,292,787 |
| Sports Wagering Revenue | $28,943 | 134.3% | $12,353 | $166,334 | 34.6% | $123,552 |
| Internet Gaming Win | $99,450 | 101.6% | $49,328 | $970,338 | 101.0% | $482,695 |
| Casino Gaming Win | $147,074 | - 29.5% | $208,553 | $1,512,522 | -43.7% | $2,686,540 |
| Quarterly Revenue (Industry, $ In Thousands) | Q3 2020 | % Change from Prior Year | Q3 2019 | YTD September 30, 2020 | % Change from Prior Year | YTD September 30, 2019 |
|---|---|---|---|---|---|---|
| Casino | $398,733 | -18.7% | $490,347 | $865,604 | -34.2% | $1,315,609 |
| Rooms | $143,490 | -29.2% | $202,711 | $241,104 | -50.0% | $$482,424 |
| Food & Beverage | $50,900 | -68.8% | $162,918 | $154,639 | -64.7% | $437,704 |
| Entertainment & Other | $36,191 | -50.4% | $72,896 | $85,035 | -54.4% | $186,500 |
| Casino Licensees Total Revenue | $629,314 | -32.2% | $928,872 | $1,346,355 | -44.42% | $2,422,236 |
Atlantic City Hotel Lodging
Source: N.J. Division of Gaming Enforcement
| Casino Hotel Lodging Statistics For the Period Ended September 30, 2020 |
Q3 2020 | Q3 2019 | YTD 2020 | YTD 2019 |
|---|---|---|---|---|
| Occupancy percentage | 72.9% | 90.8% | 70.6% | 81.2% |
| Average Daily Room Rate (ADR) | $159.11 | $161.06 | $144.89 | $145.51 |
| Revenue Per Available Room (RevPAR)* | $115.99 | $146.24 | $102.29 | $118.15 |
* RevPAR= ADR X Occupancy Percentage
[Note: Atlantic City’s casino hotels were closed in April, May and June due to COVID-19 restrictions.]
Atlantic City Statistical Transportation Data
Source: South Jersey Transportation Authority
| Travel Mode | November 2020 |
Change from Prior Year |
November 2019 |
YTD November 2020 |
Change from Prior Year |
YTD November 2019 |
|---|---|---|---|---|---|---|
| AC Expressway | ||||||
| Total Toll-Paying Traffic Pleasantville Toll Plaza |
986,844 | -35.7% | 1,534,947 | 13,037,517 | -29.4% | 18,458,288 |
| AC Airport | ||||||
| Scheduled Service Passengers | 32,141 | -60.8% | 82,059 | 391,895 | -58.1% | 935,832 |
| Charter Passengers | 1,552 | -82.3% | 8,749 | 26,973 | -71.4% | 94,366 |
| Total Air Passengers | 33,693 | -62.9% | 90,808 | 418,868 | -59.3% | 1,030,198 |
Atlantic City Meetings and Conventions Data
Source: MeetAC
| Dec '20 | Dec'19 | % Change from Prior Year |
TOTAL 2020 YTD |
TOTAL 2019 YTD |
% Change from Prior Year |
|
|---|---|---|---|---|---|---|
| Conventions/Tradeshows/Meetings | ||||||
| # of Shows | 1 | 12 | -92% | 21 | 87 | -76% |
| # of Room Nights | 0 | 20,064 | -100% | 68,752 | 263,863 | -74% |
| # of Delegates | 40 | 17,620 | -100% | 145,239 | 387,212 | -62% |
| Delegate Spending | $3,162 | $12,052,113 | -100% | $75,647,524 | $202,649,006 | -63% |
| Boardwalk Hall Bookings | ||||||
| # of Shows | 0 | 3 | -100% | 11 | 56 | -80% |
| # of Attendees | 0 | 1,518 | -100% | 129,722 | 329,424 | -61% |
| Hotel Bookings | ||||||
| # of Shows | 0 | 10 | -100% | 42 | 178 | -76% |
| # of Room Nights | 0 | 6,053 | -100% | 30,390 | 126,703 | -76% |
| # of Attendees | 0 | 3,673 | -100% | 46,200 | 131,254 | -65% |
| Delegate Spending | 0 | $2,206,245 | -100% | $24,624,740 | $72,595,552 | -66% |
| Monthly Totals | ||||||
| # Convs_Trade_Mtgs / Boardwalk Hall / Hotel | 1 | 25 | -96% | 74 | 279 | -73% |
| # of Room Nights | 0 | 26,117 | -100% | 99,142 | 390,566 | -75% |
| # of Attendees | 40 | 22,811 | -100% | 321,161 | 612,109 | -48% |
| Delegate Spending | $3,162 | $14,258,358 | -100% | $100,272,264 | $275,244,558 | -64% |
LIGHT Snapshots is a publication of the Lloyd D. Levenson Institute of Gaming, Hospitality
& Tourism at Stockton University
Jane Bokunewicz, Ph. D., Institute Coordinator and Associate Professor of Hospitality
Atlantic City Information
Atlantic City Council approves two ordinances regulating short-term rentals - As reported by The Press of Atlantic City, on December 16, the City Council of Atlantic City voted to approve two ordinances regulating the operation of short-term rentals. The ordinances amend annual fees, occupancy loads, age limits and parking availability as well as capping the total number of short-term rental permits to be issued for the Chelsea neighborhood. Through these ordinances, the Council hopes to "balance the rights of short-term rental operators and property owners with the health, safety and general welfare of year-round residents and businesses."
NJ Transit announces completion of Positive Train Control (PTC) installation and implementation ahead of national deadline - As reported by The Press of Atlantic City, NJ Transit announced December 18 that the federally required PTC emergency braking system has been successfully installed and implemented accross the state's 12 rail lines. Installation of the PTC system was responsible for closure of the Atlantic City Rail Line for eight months in 2018 and 2019.
RX5 Cyber Center partners with U.S. Department of Housing and Urban Development (HUD) on EnVision Center to be housed at former Atlantic Club parking garage - According to The Press of Atlantic City, on December 21, U.S. Secretary of Housing and Urban Development Ben Carson joined state and local officials and residents to announce the opening of a HUD EnVision Center in Atlantic City. The new center, which will soon move into space at the former Atlantic Club parking garage, will focus on job creation and training for area residents. The center will also provide support in attaining educational goals and accessing quality health care.
South Inlet, long barren, could soon see development - According to The Press of Atlantic City, rezoning, coupled with changes in the housing market, could lead to redevelopment of the barren South Inlet. The area, once host to densely packed single and multi-family units, could once again thrive as an area for second-home ownership. However an estimated $100 million in infrastructure work may need to be done before development can begin.
Trump Plaza to be demolished, city auctions off right to 'push the button' - As reported by The Press of Atlantic City and Courier Post, the former Trump Plaza casino is slated for demolition in February 2021. The city has decided to auction off the right to 'push the button' to blow up the building as a fundraiser for the Boys & Girls Club of Atlantic City . Atlantic City Mayor, Marty Small, hopes the auction will raise over $1 million. The former casino, which opened in 1984, closed in 2014 and has remained vacant since. The city declared the building a safety hazard in spring 2020 when a storm damaged its facade sending debris falling to the street and Boardwalk below. As of December 30, bids to 'push the button' had exceeded $175,000.
U.S. Department of Housing and Urban Development (HUD) awards $64,724 in Family Self-Sufficiency Program grant funds to the Atlantic City Housing Authority, $450,000 Choice Neighborhoods Planning Grant for Stanley S. Holmes Village and the Westside neighborhood - As reported by The Press of Atlantic City, on December 18, HUD announced funding awards for its Family Self-Sufficiency (FSS) Program. The program is designed to help "HUD-assisted famililes to increase their earned income and reduce their dependency on welfare assistance and rental subsidies." The Atlantic City Housing Authority will receive $64,724 to assist in their efforts to connect participating families with resources and opportunities that put them on the path to self-sufficiency. On December 16, HUD announced that Stanley S. Holmes Village and the Westside neighborhood of Atlantic City would be among 11 communities nationwide to receive $450,000 to fund redevelopment planning and revitalization efforts through the Choice Neighborhoods Program.
New Jersey Gaming News
Casino workers approve contract extension with Borgata Hotel Casino & Spa and five regional Caesars Entertainment properties - According to The Press of Atlantic City, Unite Here Local 54, a union which represents over 10,000 hotel, gaming and food service workers accross New Jersey and eastern Pennsylvania, announced that its members at Borgata Hotel Casino & Spa and five Caesars Entertainment properties (7,200 in total) approved a contract extension which "fully funds healthcare, provides raises for all employees and further ensures job security.”
FanDuel opens first retal sports betting space in Atlantic City - As reported by The Press of Atlantic City, FanDuel, which controls roughly half of New Jersey's sports betting market, opened its first Atlantic City retail betting space at Bally's Atlantic City. The temporary space, which opened December 22, will soon be replaced by a permanent sportsbook as part of several capital improvement projects planned for the casino, which recently changed ownership.
Harrah's Resort Atlantic City re-opens World Series of Poker room - As reported by The Press of Atlantic City, Harrah's re-opened its World Series of Poker room on December 26. It is the second property to bring back live poker since the industry-wide shutdown in March 2020.
Ocean Casino Resort opens new high-limit slot experience - As reported by The Press of Atlantic City, on December 28, Ocean Casino Resort officials announced the opening of "The Cove" a 7,450-square-foot high-limit slot area.
National Gaming News
BetMGM secures sponsorship agreement with Philadelphia 76ers - as reported by the Philadelphia Business Journal, BetMGM has been named the "official sports betting partner" of the Philadelphia 76ers. As part of the agreement Borgata Hotel Casino & Spa Atlantic City has been designated the "Official Away Game Host of the Philadelphia 76ers.”
Hard Rock International announces launch of Hard Rock Digital, expansion of sports betting and online gaming - According to a December 14 release from Hard Rock International, shared by PRNNewswire, the company has launched Hard Rock Digital as an expansion of its portfolio in the high-growth markets of sports betting and online gaming. Hard Rock Digital is a joint venture and the "exclusive vehicle" for Hard Rock and Seminole Gaming (SGA)'s worldwide interactive gaming and sportsbook operations.
Michigan state legislature passes bill permitting multistate liquidity for online poker in future, Michigan Gaming Control Board issues provisional operator licenses in advance of eary 2021 online casino launch - According to Online Poker Report, legislators in Michigan passed Senate Bill 0991 on December 18. While the bill does not allow for multistate online poker immediatly, it does allow for a multistate agreement to be reached in future. Michigan Governor Gretchen Whitmer approved the bill on December 30. According to Online Poker Report, the Michigan Gaming Control Board issued the the state's first provisional operator licenses for online casinos in early December in anticipation of an early 2021 launch of online casino gaming, sports betting and daily fantasy sports for the state.
Nevada casinos, limited to 25% occupancy, see 17.8% year-over-year decline in November gaming revenue despite record performance of sports betting operators - According to Calvin Ayre, the Nevada Gaming Control Board reported total state wide gaming revenue of $771.2 million in November 2020 a 17.8% decline from the same month in 2019 and $50 million less than October 2020. Nevada sportsbooks reported record football betting handle of $502 million for November 2020 resulting in $55.9 million of the state's total $61.8 million in sports betting revenue for the month. Operating under the same occupancy restrictions, New Jersey sportsbooks realized a record $931.6 million in sports betting handle for November 2020 compared to Nevada's $609.6 million. Nevada Governor Steve Sisolak announced occupancy restrictions for casinos in the state would continue at least through January 15.
Penn National Gaming reaches deal in operation of Maryland Casino - According to Calvin Ayre, Penn National Gaming annouced a deal to acquire the operation of Hollywood Casino Perryville of Perryville, Maryland. Penn National Gaming (PNG) opened the property in 2010 as the first casino in the state before selling it to its real estate investment trust (REIT) Gaming & Leisure Properties Inc (GLPI) as part of a corporate restructuring in 2013. In spring 2020, GLPI gave PNG the option to reacquire the operations of Hollywood Casino Perryville, an option PNG is expected to exercise in mid-2021. PNG will pay $7.77 million in initial annual rent to GLPI for an initial 15-year term, with the opportunity for a total of four five-year extensions. With the close of this deal, PNG will have a presence in 20 U.S. states and access to Maryland sports betting when it is eventually legalized.
Pennsylvania casinos ordered to close December 12 through January 4 - As reported by Casino.org and PennBets, Pennsylvania Governor, Tom Wolf, ordered the state's 13 casinos to shutdown between December 12 and January 4 with the hope of slowing the spread of COVID-19. Once reopened, Pennsylvania's casinos will continue to be under multiple restrictions, including limits on occupancy (50% maximum), smoking, and alcohol. The closures (nearly four months total), combined with operating restrictions, are expected to result in approximately $1 billion less in slots revenue and $400 million less in table games revenue for the industry in 2020 compared to 2019.
Hospitality & Tourism News
Casino Reinvestment Development Authority (CRDA) approves designation of Showboat water park project as entertainment retail district - As reported by The Press of Atlantic City, on December 29, the CRDA voted to recognize the $100 million indoor water park project, being built on vacant land adjacent to the Showboat hotel, as an entertainment retail district. This designation entitles the property to an annual tax rebate of up to $2.5 million for its first 20 years of operation.
National Restaurant Association partners with third-party delivery companies on seven public policy principles to encourage transparent and fair delivery practices - As reported by Nation's Restaurant News, The National Restaurant Association, in partnership with third-party delivery companies (including Grubhub, Uber Eats, and DoorDash), announced seven public policy principles intended to guide legislators in developing legislation that promotes fair delivery practices. The principles focus on transparency, communication and protection of all parties involved, and reflect increased concern, as consumers have increasinly turned to third-party delivery services amid the pandemic, that restaurants are being listed on third-party delivery apps and websites without their knowledge or consent.
New Jersey governor vetoes bill expanding outdoor dining - According to a release and statement from the office of New Jersey Governor Phil Murphy, the governor chose to veto a bill (A4525/S3128) which would have permitted restaurants, bars, distilleries and breweries to utilize outdoor spaces or public sidewalks as an extension of their business premises for the duration of the public health emergency. The governor applauded the efforts of the bill's sponsors to assist struggling businesses, but noted the bill encroached "on the authority of both the ABC and municipal government to protect the public’s health and safety" and that the goals of the bill had already been achieved. As reported by The Press of Atlantic City as of January 7, several New Jersey legislators intend to challenge the veto. On January 11 the state Senate and Assembly passed S3340/A5246 a bill simmilar to A4525/S3128 which addresses the concerns raised by the Governor which led to his veto.
New York City shuts indoor dining - As reported by Nation's Restaurant News, as of December 14, New York City dining establishments were required to close all indoor dining. New York Governor Andrew Cuomo ordered indoor dining to shut in response to rising COVID-19 hospitalization rates, which topped 5,000 for the first time in nine months on December 10. According to contact tracing data provided by the state, 73.8% of COVID-19 cases are caused by community spread via household and social gatherings, with 1.4% attributed to restaurants and bars. Thanksgiving may have increased infections related to household and social gatherings.
Plan released by Centers for Disease Control and Prevention (CDC) prioritizes COVID-19 vaccinations for food service workers as "other essential workers;" American Hotel and Lodging Association pushes for prioritization of hotel workers in state vaccination plans - As reported by Nation's Restaurant News, the CDC categorized food service workers as "other essential workers," recommending they be among the first to receive COVID-19 vacination. Food service and "other essential workers" would fall under the CDC's recommended round 1c of vaccine distribution, following frontline essential workers and people 75 and older (1b), and residents of long term care facilities and healthcare workers (1a). The CDC plan is a recommendation for states, which determine their own vaccine distribution plans. As reported by Lodging Magazine, the American Hotel and Lodging Association (AHLA) called on governors and state public health agencies to prioritize hotel workers in vaccination plans. The AHLA is requesting that hotel workers be included in round 1b of vaccine distribution as they continue to serve frontline emergency and healthcare workers. Hotels in some locations have been utilized as places to quarantine individuals and workers are exposed to greater risk by interstate travelers.
