Mirror, Mirror on the Wall, Whose Casino is the Most Profitable of Them All?

AC Aerial Photo - Boardwalk Casino Properties - Header

By Anthony Marino, MA


Surprisingly, it’s no longer the Borgata.  Unsurprisingly, because of their size and revenue sources, it’s neither the Golden Nugget or Resorts International.


For the last two decades since it opened in the summer of 2003, the Borgata Hotel Casino & Spa has consistently dominated its local and regional casino competition in amassing gross gaming revenues and turning that cash into impressive quarterly and annual gross operating profits.  

Anthony Marino

Anthony Marino, MA

Anthony Marino was Deputy Executive Director of the Atlantic City Expressway at the start of the resort's casino era. He is now retired from the SJTA and from Stockton University where he was an adjunct professor. 

But not this year.  While the Borgata continued to outperform by a wide margin the other eight resort casinos in total gross gaming revenues, in the first half of 2023 it was suddenly passed by five other casinos in the metric that counts the most — profits.

Overall, Q2 Year-to-Date 2023 data strongly support the axiom that in Atlantic City a casino can buy the win but to earn the profits it must control the costs. The Borgata is the poster child for this: It recently set a monthly record for gross win, but the very next week posted numbers showing that its profits had plunged $53 million in one year.

The data in Tables 1 and 2 provide evidence that gross gaming revenue doesn’t necessarily get transformed into profits in today’s fiercely competitive and externally challenged Atlantic City casino industry.

Gross Gaming Revenues versus Gross Operating Profits: Ranking the casinos

Year-to-date as of the end of June 2023, the Borgata raked in $644.8 million through in-person casino gambling, online casino gambling and sports wagering win.  As usual, the resort’s perennial flagship property far outdistanced its rivals.

Compare the above GGR six-month ranking to the same month period rank order of casino gross operating profits (GOP) below. Again, all numbers are in millions.

Table 1:

First 6 months of 2023: Rank Order of AC casinos in total gross gaming revenue (GGR).

Property GGR
($ in Millions)




(Including Resorts Digital)

Golden Nugget


Hard Rock







(Including Caesars Interactive NJ)







Source: NJDGE: June 2023 Revenue Report

Table 2:

First 6 months of 2023: Rank Order of AC casinos in gross operating profits (GOP). 

Property GOP
($ in Millions)

Hard Rock







(Including Caesars Interactive NJ)





Golden Nugget



(Including Resorts Digital)





Source: NJDGE: Q2 2023 Statement of Income Statistics


Shouldn't Gross Gaming Revenues be a good predictor of Gross Operating Profits?

You would think so, and through most of the 45-year history of Atlantic City’s casino era they have been. But the fact that the Borgata in the first six months of this year continued to rank No. 1 by a substantial amount in gross gaming revenue but only ranked No. 6 in gross operating profits is a very interesting development.

Equally notable is that the two smallest casinos, Resorts and Golden Nugget, ranked No. 2 and No. 3 for gross gaming revenues, respectively, but only No. 7 (Golden Nugget) and No. 8 (Resorts) in gross operating profits.

What explains the apparent Golden Nugget and Resorts anomaly?

The primary reason for the Golden Nugget and Resorts flip-flop from near the top in GGR rankings to near the bottom on the GOP list seems straightforward.  Both derive most of their gaming revenue from the online components of gross gaming revenues — sports wagering and internet casino gambling — rather than from their relatively small in-person casino floors, in-person sportsbooks, hotels and restaurants.

At Resorts, approximately 82% of GGR in the first half of this year was generated by its Resorts Digital unit, only 18% from its in-person casino. At the Golden Nugget, nearly 78% of GGR was internet generated and about 22% from its Atlantic City casino floor.

Casino representatives assert that up to 70% of revenues from sports wagering and internet gaming are passed through to their sportsbook and internet gambling partners. They complain that NJDGE monthly reports obscure the reality that properties with disproportionate income from online sources, such as Resorts and Golden Nugget, are not as profitable as their monthly total gross gaming revenues might suggest to the casual observer.

Table 2 dramatically underscores that point.  Golden Nugget’s $12.5 million and Resorts' $12.3 million GOP in the first half of this year are substantially less than those of the six properties ranked above them. Each of those six have much larger in-person gaming and nongaming facilities that generate significant revenues that do not have to be shared with external internet partners.  

Golden Nugget’s $12.5 million and Resorts' $12.3 million GOP in the first half of this year are substantially less than those of the six properties ranked above them. Each of those six have much larger in-person gaming and nongaming facilities that generate significant revenues that do not have to be shared with external internet partners."

For example, at the top of the first six months of the 2023 gross operating profits list in Table 2 are Hard Rock with $52.7 million and Ocean with $47.6 million in GOP.  Hard Rock during this period derived nearly 83%, while Ocean generated about 88% of gross gaming revenues from their respective in-person casino gambling operations. These percentages are almost the reverse of the Golden Nugget and Resorts during the same time period.

What explains the Borgata ranking #1 in GGR but only #6 in GOP so far this year?

The Borgata’s Q2 Financial Report on the NJDGE website contains one clue that stands out: an explosive increase in costs and expenses in the first half of 2023 compared to the same period last year.

In 2022, the company reported $261.5 million in total costs and expenses (Line 9 of DGE-210). This year, that number jumped nearly 31%, to $341.8 million. No other casino came close to the Borgata’s $80.3 million hike in operating expenses.

It should be noted that capital improvement expenses on a casino Statement of Income are taken below the gross operating profits line, so they are not a factor in this discussion of GOP differences and what may cause them.

But labor costs and rent are. The main casino union contract costs escalated sharply in early July 2022, so they didn’t affect the first half hourly employee labor costs last year. However, they certainly impacted salary costs in the first six months of this year, particularly if management at all nine casinos also extended comparable salary increases to their nonunion employees, including executive staff.

Likewise, as stated in the footnotes of the casino's Quarterly Financial Report, a master lease agreement between MGM Resorts and VICI, which commenced April 29, 2022, saw operators paying four more months of rent, an additional $45.7 million, in the first half of 2023 than in the first half of 2022.

Thus, the significant employee cost differential combined with the additional rent payments might go a long way in explaining the Borgata’s $80 million increase in costs this year. All hourly employee salaries increased proportionally equal at all nine casinos. But because the Borgata has the largest workforce and because other casinos have been poaching its upper managers, the Borgata was perhaps inclined to boost handsomely the salaries of those that have stayed.

But that’s speculation. That kind of information is not typically said publicly or stated in clear language in the notes that accompany a casino’s Quarterly Financial Report.

On the other hand, the Borgata’s publicly available 2023 Q2 Schedule of Promotional Expenses and Allowances (Form DGE-245) shows that the company doled out $166 million in comps in the first six months of this year. In 2022, during the same time period the equivalent number was about $139 million, an increase of $27 million, about 19% of the $80 million increase on the Borgata’s total cost and expenses line in one year.

Interestingly, Hard Rock, which took over the lead this year in GOP at the halfway mark, spent only $116 million in comps while Ocean Casino, No. 2 on this year’s GOP list, spent nearly $91 million on comps, both substantially less than the Borgata.

These numbers suggest that the Borgata’s generosity in ladling out patron comps played a role in losing the GOP lead, while still remaining top dog in the GGR battle.  

The Borgata’s internet revenue boosts its GGR, but how about its profitability?

Sharp increases in labor costs and generous comping of patrons affect separate ends of the profitability formula. A third input variable in this formula, discussed earlier about the Golden Nugget and Resorts —reliance on gross gaming revenue from internet income that passes through to third-party partners — also applies to the Borgata.

In the Borgata’s case, the primary third-party partner is BetMGM, owned by MGM and the UK’s Entain in a 50-50% joint venture. Entain bills itself as one of “the world's largest sports betting” companies. I note that most major sports betting companies are now heavily invested in internet casino gambling. BetMGM certainly is. I also note that it has an office in New Jersey, headquartered not in Atlantic City but in Jersey City.  

In the first half of 2023, the Borgata derived 55% of its total GGR of $644.6 million dollars from its in-person casino and 45% from sports wagering and internet casino gambling. Hard Rock reported an 83-17% split and Ocean an 88-12% split during the same period. Both reported significantly less total GGR than the Borgata but notably higher GOP, underscoring that those monthly gross gaming reports may make headlines, but the quarterly financial reports show us the more important news — who is turning gross win into gross profits.

Important reminder:  

All nine casinos are still profitable but with the exception of Hard Rock and Ocean the other seven, including the Borgata, have experienced sharp declines in profits since 2017. Hard Rock and Ocean opened in mid-June 2018.

In the case of the Borgata, its robust sports betting revenue and internet casino gaming revenue doesn’t appear to significantly boost its profits. A very interesting note appears on page 2 of its Q2 Financial Report that may explain why. The paragraph titled "Internet Gaming and Sports Wagering" is lengthy but strongly suggests to this nonaccountant that BetMGM is the primary “skin” in generating both sports wagering and internet casino gambling revenue for the Borgata, and BetMGM contractually (in my nonaccountant phraseology) gets 100% of internet revenues minus costs incurred locally by the Borgata.

Thus it appears, if I interpret that financial note correctly, that most of the Borgata’s sports betting win plus its internet casino gambling revenue generated in Atlantic City passes through to its “partner” BetMGM ‘s Jersey City headquarters and is then forwarded to MGM Corporate in Las Vegas and Entain headquarters in London. 

Perhaps the executives at the Borgata need to look in the mirror and ask themselves how to better control patron comps, how to deal with sharply higher hourly and salaried labor costs, and how to convince corporate headquarters it would require a large chunk of internet revenues to stay in Atlantic City for the Borgata once again to claim the crown as the “Most Profitable of Them All.”

This article shared with permission from Anthony Marino. Based on analysis orignially released via email on September 3, 2023.