Detroit Stands To Lose $600,000 A Day Until All Michigan Casinos Reopen

Written By Matt Schoch on May 27, 2020
Detroit losing while casinos remain closed

Detroit is losing $600,000 a day because its casinos are closed. It will be out $112 million by next summer because of COVID-19 pandemic impacts, according to the city’s estimates.

Greektown Casino-Hotel, MGM Grand Detroit and MotorCity Casino will be closed through at least June 12 with projections forecasting more than one more year of shortfalls due to the coronavirus.

The Detroit Free Press cited these numbers in a report Wednesday that detailed the city’s losses from the closures, while tribal casinos throughout Michigan slowly start to open their doors.

More than half of the state’s 26 casinos are reopening by next week.

Detroit casinos will stay closed into June

Michigan’s 12 federally recognized Native American tribes are free to open the state’s 23 tribal casinos. As of Wednesday afternoon, 16 tribal casinos were either open or will reopen by June 8.

The Detroit trio, however, is tied to stay-at-home orders from Gov. Gretchen Whitmer. The latest order expires on June 12, after several extensions.

Detroit Mayor Mike Duggan said earlier this month that Detroit’s casinos won’t fully reopen until there is a COVID-19 vaccine, which could take about a year.

Losses mount for casinos and the city

The Detroit casinos had adjusted gross receipts of $1.45 billion in 2019. From that, a 10.9% wagering tax raised more than $184 million for the city.

All three facilities closed on March 16, five days after Michigan sports betting opened in the city.

With the casinos closed for about a month-and-a-half, the Michigan Gaming Control Board reported a 39.2% drop in revenue through April from Detroit casinos compared with the same period in 2019.

The city estimates that 16% of Detroit’s general fund revenue comes from the casinos, according to the Free Press. The influx is the city’s third-largest funding source after local income taxes and state revenue sharing payments.

The state of Michigan also took in more than $117 million from Detroit casinos in 2019.

Detroit casinos have safety measures for reopening

MGM Grand’s parent company has announced a seven-point safety plan for reopening its casinos, and Greektown’s Penn National Gaming has released its general guidelines.

Throughout the country, casinos are requiring masks and temperature checks upon reopening.

Casinos in Michigan have used several safety measures to limit exposure. Measures include:

  • Keeping every other slot machine turned off.
  • Limiting the number of players at table games.

According to the COVID-19 Casino Tracker by the American Gaming Association, 181 casinos were open nationwide on Wednesday afternoon, while 808 were closed.

Official: Detroit will ‘have a balanced budget’

David Massaron, Detroit’s chief financial officer, told the Free Press that projections that take soft openings and restrictive capacities into account have the city out $112 million by June 2021.

“We have assumed that those casinos are not operating at full capacity for over a year. And we anticipate that when they restart, it will be at a lower density — so fewer people, fewer concerts and entertainment events.”

Massaron also said the city will adjust and have a balanced budget for the new fiscal year.

Online casinos will help down the road

The industry will be boosted down the line by the implementation of online sports betting and online casinos.

States such as New Jersey, Pennsylvania, and Indiana are mitigating some of their brick-and-mortar casino losses with mobile sports betting apps, despite much of the sports world being shut down.

The latest estimates for when Michigan casinos will be able to launch range from August until early 2021.

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Matt Schoch

A Michigan native, Matt has worked at newspapers in Michigan, Missouri and the Virgin Islands. A versatile sports reporter, Matt has covered sailing on the Great Lakes, cricket in the Caribbean, high school and pro playoffs, and the Olympics in Rio. He’s also the former host of the Locked On Pistons Podcast and producer of a documentary on Emoni Bates. A former blackjack dealer, Matt has studied the industry from all sides.

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