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Detroit Casinos Soar Past Expectations After Reopening In August

Article by : Helen Oct 7, 2020

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Updated: Feb 3, 2023

The pandemic hit Detroit’s casino community hard early on. An early March shutdown called for hundreds of millions of dollars in revenue to be lost. The state of Michigan and the city piled on tens of millions in tax dollars.

Last month, 1,100 people got laid off because of COVID’s impact on capacity limitations. These workers will remain on a recall list as time goes on. For the crew whose still there, COVID-19 threw the gaming industry in an unprecedented limbo. Restrictions were set, and revenue fell. During August, it fell 42 percent on a year-by-year measure. After reopening, revenue earnings impressed while being at 15 percent of capacity.

There are three casinos located in Detroit. MGM Grand Detroit, Greektown Casino, and Motorcity Casino are the locations where 15 percent capacity was offered. Motorcity Casino sent out an email to subscribers promoting their poker room opening back up.

Greektown Casino is hoping for their poker room to open up in the next few weeks. MGM Grand Detroit offered no plans for reopening their poker room. Before any poker rooms reopen, board approval is required.

Detroit casinos account for a heavily proportioned income for the city. The loss of jobs and casino guests calls for the early loss of revenue for the gaming industry. The casinos gave a reported $69.2 million in revenue for last month.

Casinos hold a lot of people, so the limited capacity reopening attracted more visitors than initially thought. Michigan’s Gaming Control Board (MGCB) is in charge of social distancing and safety requirements for the casinos.

Mary Kay Bean, a spokesperson for MGCB, commented on the public safety approach. “It is the same approach used before the reopening of the casinos,” said Bean.

We are trending ahead of where we are in terms of the monthly forecast, but we don’t know what that portends for the year as a whole. We don’t know if that is pent-up demand, or if it is the beginning of the upward ramp-up.

The city predicts tax revenues from casinos will equal $135 million for the fiscal year, which is a 25 percent decline from the $184 million for the 2019-20 fiscal year that ended after June and included part of the shutdown.

Casinos in Las Vegas were allowed to open at 50 percent capacity back in June. Atlantic City casinos were allowed a 25 percent capacity limit back in July. Detroit came after with its strict capacity limit compared to the other casino counterparts.

The three Detroit casinos came back in August following the strict health guidelines. Since the time of reopening, revenue has been coming in at $2 million per week. That is good for 50 percent of typical tax revenues for August.

MGM Grand Detroit reopened August 7 and reported a $28.6million revenue for the month. This income was brought in as earnings were down 46 percent. Greektown and Motorcity opened up on August 5. MotorCity Casino fell to 37.5 percent in revenue to $25 million, while Greektown Casino dropped to 41.5 percent to $15.7 million in revenue for the month of August.

Getting back to normal levels of revenue will remain an uphill climb. The University of Michigan forecasted a “deep and long-lasting” toll stemming from the pandemic. They speculated that Detroit’s job market would not rebound until 2023. The city projects a return to pre-pandemic employment levels by the end of 2022. Either way, the rest of this year is set in stone.