Detroit, State, Tribes Missing Out On Millions With Casinos Closed

Each month, the Michigan Gaming Control Board issues a report. It includes how much Detroit’s three commercial casinos netted in revenue, including taxes paid to the state and city.

For the first time since the casinos opened in the summer of 1999, the monthly revenue for April 2020 will be $0.

Detroit’s three casinos closed on March 16 and, per an executive order from Gov. Gretchen Whitmer, will be closed through at least May 28 due to the COVID-19 pandemic.

Many economic sectors face hardship during the slowdown, but casino revenue being zeroed out is quite harsh for the companies, the industry and public coffers.

April has meant consistent revenue for Detroit casinos

Going back several years, Detroit casino revenue in April has been remarkably consistent, according to numbers collected by the Center for Gaming Research at the University of Nevada, Las Vegas.

Detroit’s casino revenue for April has averaged more than $121 million over the last nine years, with only one month ($112 million in April 2014) landing more than $4 million away from that average.

In 2019, the Detroit casinos had more than $125 million of April revenue.

But early 2020 had indicators that revenue could have been ticking up.

January and February revenues of $120 million and $121 million, respectively, represented a 6.7% increase from the same two months of revenue in 2019.

Michigan casinos retail sports betting could have provided boost

On March 11, Greektown Casino-Hotel and MGM Grand Detroit opened retail sportsbooks with MotorCity Casino following the next day.

The casinos were open for six days after the first legal sports bet was placed in the state, with many of the world’s major sports leagues already suspended during that time.

The casinos reported $105,548 in adjusted gross receipts from sports betting, with Michigan netting $3,990 and the city of Detroit collecting $4,876.

With college basketball’s Final Four originally scheduled for April 4-6, along with the opening of the NHL and NBA playoffs and coverage of the NFL Draft, the month looked like it could be a big one for fans to get an early look at the new sportsbooks.

Then, COVID-19 shut down much of American life.

Public missed out on big revenue share

Because of the addition of sportsbooks and the typically crummy Michigan weather keeping folks indoors, it’s reasonable to conservatively project that April 2020 will hit the average revenue of the last several Aprils.

If 2020 matched the average revenue of the past nine years, Detroit casinos would’ve netted more than $121 million.

With an 8.1% wagering tax, the state would’ve raised $9.8 million. With 10.9% taxes on the net win, Detroit would’ve netted $13.2 million. Development agreement payments would tack more on to the city’s take.

Tribal casino closures impact state, local entities

Michigan’s 24 tribal casinos also were all shut down by March 22.

With Island Resort and Casino in Harris turning back on its plans to reopen on Wednesday, that is more than 45 days without tribal casino gaming.

According to the 2019 annual tribal gaming report by the MGCB, Michigan’s 12 federally recognized tribes contributed more than $54 million to the state’s strategic fund or the Michigan Economic Development Corporation. Tribal casinos also contributed more than $30 million to local governments in 2% revenue sharing payments.

Though there is no breakdown of monthly revenue patterns, the more than $84 million contributed by tribal casinos to the state and local governments comes out to more than $230,000 per day. So, a 45-day shutdown could cost public entities $10.4 million — and counting.

That’s without mention the revenue hits for the tribes themselves.

A recent report from Bridge Magazine, a nonprofit news organization in Michigan, quoted Frank Ettawageshik, executive director of the United Tribes of Michigan, as saying gaming revenue provides about half the funds for tribal governments.