For the first time in four months, monthly revenue totals at Detroit’s three commercial casinos were greater than zero.
Monday, the MGM Grand Detroit, MotorCity Casino Hotel, and Greektown Casino-Hotel, which all closed March 16 due to the COVID-19 pandemic and were allowed to reopen in August at limited capacity and under strict safety guidelines, reported combined August revenue of $69.3 million, according to the Michigan Gaming Control Board.
MGM Grand Detroit reported $28.6 million in revenue for the month, good for a 41% market share compared to MotorCity and Greektown, whose August revenues of $25 million and $15.7 million claimed 36% and 23% market shares, respectively.
The casinos, which are required to operate at 15% capacity under Gov. Gretchen Whitmer’s executive order, generated less revenue than in August 2019 or during January or February of this year (the last two full months of operation pre-COVID), but that was expected.
Altogether, revenue for slots and table games at the Detroit casinos dropped 42% from August 2019‘s $119.8 million. In January and February of 2020, prior to the pandemic shutdown, the casinos logged $120 million and $121.8 million in revenue, respectively. So, despite the capacity restrictions, Michigan’s three commercial casinos managed to produce 56.9% of the revenue that they had generated in February, without capacity limits. Year-to-date, the casinos’ combined revenue through August of $368.6 million has slipped 62%, compared to the first eight months of last year.
The casino reopenings meant a boost for pandemic-battered budgets at the state level and in the city of Detroit, where a former city manager once called wagering taxes “the single most stable source of revenue available to the city.” In August, MGM Grand Detroit, MotorCity, and Greektown contributed a combined $5.6 million in taxes to the state and $8.3 million in wagering taxes and development agreement taxes to Detroit, according to the MGCB. Those figures are down from $9.7 million to the state and $18.5 million to the city in August 2019, respectively.
Layoffs at Greektown, MGM Grand Detroit
The reopening of Detroit’s casinos may have created a welcome increase in wagering tax receipts for the city and state, but it still hasn’t been enough to prevent job losses.
Earlier this month, the Greektown Casino-Hotel announced it would lay off 43 union workers beginning on Sept. 28 or during the following 14 days. In June, Greektown disclosed plans to furlough more than 600 employees.
“These layoffs at Greektown Casino-Hotel are the unfortunate result of COVID-19 related business circumstances that were sudden, dramatic and beyond our control,” said John Drake, Greektown’s vice president and general manager, according to The Detroit News. “These significant drags on our business will likely continue for the foreseeable future. Finally, we could not have anticipated when our properties would be allowed to reopen and how restrictive the new operating conditions would be, and the negative impact this would have on business volumes.”
MGM Resorts International laid off 18,000 employees nationwide at the end of August, including roughly 1,100 MGM Grand Detroit casino workers.
At the time of the job losses, MGM President and CEO Bill Hornbuckle wrote in a company-wide memo: “It has been nearly six months since we temporarily closed all our U.S. properties due to COVID-19 and were forced to furlough nearly our entire domestic workforce. While we have safely resumed operations at many of our properties and have returned tens of thousands of our colleagues to work, our industry — and country — continues to be impacted by the pandemic, and we have not returned to full operating capacity.”
First true glimpse at sports betting figures
After Gov. Whitmer signed the Lawful Sports Betting Act into law in December 2019, the Detroit commercial casinos applied for and received operating licenses to begin taking sports wagers beginning March 11 of this year. MGM Grand and Greektown opened retail sportsbooks that day, while MotorCity unveiled its brick-and-mortar sportsbook on March 12.
The sports gambling excitement was short-lived, however, as COVID-19 forced the closure of all three Detroit casinos less than a week after the sportsbooks began operating. In those few days, however, the MGCB reported $105,548 in adjusted gross receipts from sports betting. The August revenue figures don’t quite reflect a full month’s worth of sports betting, since MotorCity and Greektown reopened on Aug. 5 and MGM Grand Detroit reopened Aug. 7, but the numbers still represent the closest anyone has seen to monthly net revenue from sports gambling at the state’s commercial casinos.
Altogether, the three casinos reported $1.97 million in adjusted sports gambling revenue, according to the MGCB. MGM Grand’s gross receipts totaled $932,601, while MotorCity and Greektown generated $493,275 and $551,176, respectively. The net revenue represents overall betting receipts minus free play incentives offered to and wagered by sports bettors, the MGCB said.
Mobile sports gambling and iGaming is expected to launch in Michigan by the end of 2020 — possibly in time for Thanksgiving, according to one state lawmaker. At that point, sports betting handle and net revenue are expected to increase significantly thanks to the convenience of placing online bets and the multitude of partnerships already in place between commercial and tribal casinos in Michigan and internet sportsbook platforms like FanDuel, DraftKings, BetRivers, and many others.