The Detroit casino market posted more than $1.44 billion in gaming revenue in 2018, according to figures released Tuesday by the Michigan Gaming Control Board.
The amount was an all-time for the Michigan commercial casino market. The three Detroit casinos won $1.42 billion in 2011, which was the previous record. The $1.44 billion was a 1.4% gain over the previous all-time high for the Wolverine State.
In terms of a year-over-year comparison, commercial casino win was up 3.1% from 2017.
Slots dominate market
Historically, slots machines have had an unusually large market share in Detroit, and that trend continued in 2018. According to the state, the one-armed bandits accounted for $1.17 billion of revenue, or 81%. For comparison, slot machines in Nevada account for about 64% of overall gaming revenue, and in Pennsylvania, it’s about 72%.
The 81% market share for the slot machines was the same as it was in 2017.
The dominance of the machines was apparent in subtle 11th-hour changes to the Michigan online gaming legislation, which was vetoed by the governor late last year. The House version of the legislation stipulated that online gaming must include only the regulation of peer-to-peer poker play, effectively giving regulators discretion as to the other games to be authorized. However, after the Senate was done with the legislation, it had been amended to stipulate that other casino games, including slots, must be part of the regulation.
It might seem like a minor tweak to the language, but it was likely added to appeal to the Detroit casinos, which, collectively, weren’t exactly all-in on the legislation. They weren’t openly opposing the Michigan Lawful Internet Gaming Act, but their lack of enthusiasm ultimately proved striking.
None of them put out public statements with regard to the failed legislation.
MGM leads market
MGM Grand Detroit gained market share in 2018. According to the MGCB, the casino generated $619.2 million in winnings, which was 43% of the market. The casino had 42% of the market in 2017.
MGM Grand’s revenue was a record, besting its previous high of $604.9 million in 2012.
MotorCity Casino, the only one of the casinos to openly support the Lawful Internet Gaming Act, had record revenue of $489.7 million, or 34% of the market. However, its market share was unchanged year-over-year. MotorCity’s previous high was $480.2 million in 2007.
It wasn’t as great of a year for the city’s third gambling facility, the Greektown Casino. Its revenue did grow year-over-year, but it didn’t set a record like its rivals. The casino, which is currently transitioning into a Penn National Gaming property, posted gaming win of $335.2 million.
Here are the year-over-year revenue gains for the casinos
- MGM: 4.6%
- MotorCity: 2.3%
- Greektown: 1.7%
Greektown’s market share was 23%, down from 24% in 2017.
Taxes derived from gambling in the state were a key component of the veto from former Gov. Rick Snyder, or at least so he claimed in his letter. Snyder said he was worried that online gaming might reduce tax revenue that the state receives from gambling.
The online casino bill did set a lower tax rate for online play than what is on the books for brick-and-mortar gambling.
The three Detroit casinos paid $117 million in gaming taxes to the state of Michigan during 2018. The casinos also paid $182.9 million to the city of Detroit, based off their collective gaming revenue.
The online casino law would have set the iGaming tax rate at 8% for the state and 1.25% for Detroit. There’s an 8.1% state tax on retail gaming at the casinos, with an additional 10.9% tax for the city. Effectively, the tax rate on online casinos would be less than half that of land-based.
Snyder also said he was concerned that online gambling would negatively impact the state lottery, which also possesses an online component.