Detroit Casinos Reopening At 15% Capacity, But Is That Number Sustainable?

When Gov. Gretchen Whitmer announced last week that Detroit’s three casinos could reopen this week, there were a few catches.

Front and center is a 15% capacity restriction, the lowest in the country.

Still, reopenings of Greektown Casino-Hotel, MGM Grand Detroit and MotorCity Casino will drive revenue for a city in need.

“Casinos have been operating safely across most of the country and in tribal areas in Michigan and should be able to do so in the Detroit region as well,” Whitmer wrote in her order.

The Detroit casinos closed March 16 because of the COVID-19 pandemic. Meanwhile, all but one of the state’s tribal casinos have reopened. Whitmer is allowing the casinos to reopen at 10 a.m. on Wednesday.

MGM Grand announced it will open Aug. 7 instead. Greektown posted on Twitter that it expects to open Wednesday. MotorCity will open Wednesday as well.

Michigan casinos laying off employees during coronavirus

On Thursday, Jocelyn Kelly of MGM told Playinmichigan that restriction would allow about 1,800 patrons on the casino floor. Representatives from MotorCity and Greektown did not respond to inquiries about the capacity restrictions.

However, in a letter announcing extended layoffs for 2,554 employees, a MotorCity official detailed the hardships of the restrictions, which were originally detailed by the Michigan Gaming Control Board last month.

David Turner, vice president of human resources for the casino and hotel, signed a Worker Adjustment and Retraining Notification Act notice that bemoaned the provisions and delays in reopening.

“In recognition of the limitations under those guidelines, we concluded that our operational levels would be seriously reduced,” the letter states. “Thus, we reached the conclusion late last month that only about half of our Associates would be needed when we re-opened, and we had no way to predict when we would be permitted to increase operations enough to make it feasible to bring everyone else back to work.”

The letter detailed how MotorCity Casino would not be continuing benefits for the laid-off workers after Friday as July closed.

Other states have higher capacity limits

States across the country are also imposing capacity limits on casinos, though none as strict as Michigan.

In Pennsylvania and Illinois, casinos are open at 50% capacity. In New Jersey, it’s 25%.

The capacity limit started at 25% in Louisiana, but was loosened to 50% for the next phase.

The Supreme Court ruled last week that Nevada imposing a 50-parishioner limit at churches and allowing 50% capacity at casinos was allowed.

Jacob Miklojcik, a Lansing gaming consultant, said few casinos operate at capacity anyway.

“It’s a part of the lifeblood of the city’s economy,” Miklojcik added. “Not only the gaming tax but business services tax, property taxes, and all kinds of other taxes that the casinos will continue to pay. It’s a dangerous game.”

How much will 15% capacity hurt casino business?

The Detroit casinos need as many players as possible inside to maximize revenue.

It’s tough to pinpoint how much the capacity restrictions will impact business.

There is surely a pent-up demand for casino gambling in the region. But many players, especially older ones, could stay away from such public places while the pandemic still threatens.

The Detroit Free Press spoke to two analysts with mixed opinions about the restrictions.

Alex Calderone of Calderone Advisory Group of Birmingham warns the pain will continue for casino and tax revenue.

“Unless everyone who comes in the door plays and loses five or six more times than they normally would, it’s nearly impossible to generate similar revenues.”

Casinos reopening as state still fights COVID-19

There are about 600 new coronavirus cases per day in Michigan after a drop in mid-June.

Daily death counts are far below those of March and April when the virus hit the Detroit area hard. Whitmer’s order Wednesday also restricted indoor gatherings to 10 people and closed indoor bars in northern Michigan.

“As we see COVID-19 cases continue to rise, Michiganders can not afford to drop our guard,” Whitmer said, in a statement. “We must take every step possible to save lives, protect the brave men and women on the front lines, and avoid overwhelming our healthcare system while we continue to combat COVID-19.

“After seeing a resurgence in cases connected to social gathering across the state, we must further limit gatherings for the health of our community and economy. By taking these strong actions, we will be better positioned to get our children back into classrooms and avoid a potentially devastating second wave.”