Closed Detroit Casinos Down 39.2% In 2020; Fantasy Contests Helped State

With no revenue to report for April, the Michigan Gaming Control Board released year-over-year numbers Tuesday for Detroit casinos in the first four months of 2020.

The results were expectedly grim.

The three casinos, which have been closed since mid-March because of the COVID-19 pandemic, had a 39.2% drop in revenue from the first four months of 2019.

The board also reported the first three full months of fantasy contest revenues, as more than $240,000 came to the state there – a drop in the bucket compared to state losses from casino closures.

Tough numbers for struggling sector, governments

Last year, Greektown Casino-Hotel, MGM Grand Detroit and MotorCity Casino reported $492.1 million in aggregate revenue in the first four months. This year, it was $299.2 million.

Last April, the casinos recorded $125.1 million in revenue, and not a single bet was placed in the Detroit casinos this time.

The latest executive order from Gov. Gretchen Whitmer mandates the closures continue through at least May 28 with more troubling times ahead.

All 23 of Michigan’s tribal casinos are closed and have been since late March.

State, Detroit suffering from closures

The state netted $24.2 million in taxes from the trio in this year’s first four months and $39.8 million last year, a $15.6 million decrease.

As for the city of Detroit, $35.6 million was collected in the span this year from taxes and development agreement payments, down $23 million from last year’s take of $58.6 million.

Mayor Mike Duggan said Detroit casinos may not fully reopen until a COVID-19 vaccine is discovered, operating at lower capacities and with safety guidelines until then.

Fantasy sports net state $240k in first quarter

Part of the expanded gambling laws, signed by Whitmer in December, formalized rules for daily fantasy sports operators.

Fantasy contest operators pay an 8.4% tax on monthly adjusted revenues to the Fantasy Contest Fund, which pays regulatory and enforcement expenses for the MGCB. The remainder goes to the state school aid fund.

The gaming control board also provided numbers for fantasy sports operators, who reported $2.8 million in adjusted revenues in the first quarter, netting the state $240,547 in tax dollars.

The numbers were way down after global sports largely halted in mid-March. In March alone, operators reported $431,620 in revenue after $2.4 million from the first two months. That month netted the state just $36,256.

Your home fantasy sports league is probably OK

Along with having fantasy sports operators pay taxes, the control board also has an exception for home-based fantasy sports contests.

You are allowed to offer one or more fantasy contest from your private residence, unregulated by the MGCB, if:

• The contests are not made available to the general public
• Each contest is limited to no more than 15 total fantasy contest players
• The individual collects no more than $10,000 in total entry fees for all fantasy contests offered in a calendar year
• At least 95% of entry fees are awarded to the fantasy contest players

More pain ahead with continued closures

Michigan will miss out on more revenue as the Detroit casinos remain closed.

In May of 2019, the Detroit casinos recorded $125.7 million of revenue, good for $10.2 million in taxes paid to the state and $15.0 million to Detroit.