AGA: Michigan Casinos Could See ‘Meaningful Relief’ From Stimulus

Like many companies throughout the state, Michigan casinos are hoping to weather the storm of coronavirus closures.

The American Gaming Association signaled that help should be on the way, as the group reacted positively this week to the Senate passing a $2 trillion stimulus bill, which the House approved on Friday.

“The American Gaming Association (AGA) applauds the bipartisan action taken by the US Senate on the CARES Act, which will bring meaningful relief for employees, employers, and tribal governments during this unprecedented public health crisis,” AGA President and CEO Bill Miller said, according to a statement, after the Senate sent the bill to the House. “This bipartisan Senate bill is an important step to preserve the gaming industry’s ability to continue to serve as a valuable job creator and community partner.”

 

Potential federal cash payments through stimulus

As of March 22, all of Michigan’s 26 casinos were closed because of concerns over the spreading coronavirus.
Gov. Gretchen Whitmer issued a “Stay Home, Stay Safe” directive that will keep Detroit’s three casinos closed through at least April 13. Many of the state’s tribal casinos are adopting a similar tentative timeline for reopening.

For some casinos, a mid-April reopening would still mean more than a month of lost revenue and potential hardship for workers.

According to numbers provided to Playinmichigan by the AGA, at least 19,861 direct casino employees are out of work, while the state could lose at least $1.05 billion in economic activity if the casinos are closed for two months.

The AGA estimates 37,911 jobs in Michigan are supported by the gaming industry and that casino gaming supports $1.3 billion in tax and tribal revenue sharing annually in the state.

Many of the casinos, such as the state’s largest in MGM Grand Detroit and also Upper Peninsula tribal casinos such as the Ojibwa Casinos in Marquette and Baraga, have pledged to continue to pay employees for at least part of the closures.

Other displaced workers could be eligible for expanded unemployment benefits through an executive order from Whitmer, as well as potential federal cash payments through the stimulus.

As for the casinos, they could benefit from several of the provisions in the stimulus. The Senate’s version of the package includes $500 billion for loans to businesses, payroll tax delays and tax credits for retaining employees during the slowdown.

 

Negative impact on new legal sports betting industry

The timing of the shutdown couldn’t have been worse for Detroit casinos who opened their sportsbooks while the sports world was shutting down by the hour.

MGM Grand Detroit and Greektown Casino opened their sportsbooks on March 11, and MotorCity Casino opened the FanDuel Sportsbook on March 12.

Meanwhile, the NBA suspended its season on March 11 after Utah Jazz center Rudy Gobert tested positive for coronavirus. March Madness, the precursor for the rush to open Detroit’s sportsbooks, was gone next as the NCAA Tournament was canceled on March 12.

“It’s nothing but excitement about what it can become,” said state Rep. Michael Webber, R-Rochester Hills. “We really wish that we weren’t in this situation where a lot of these live sports got canceled and postponed to really see what some of those rooms would’ve looked like on that opening weekend of the NCAA Tournament or a big fight night.

“But this too shall pass. We will eventually get into hopefully a good baseball season down the line, we’re certainly looking forward to college and professional football. Those venues will definitely be ready to accommodate our Michigan residents and out of town guests.”

In his statement, Miller estimated 650,000 direct gaming employees are idled with a two-month shutdown also impacting 17,000 gaming supplier jobs and 350,000 small business workers supposed by the gaming industry. He also estimated a two-month closure to cost the national economy $43.5 billion in lost economic activity.