Michigan Brick And Mortar Casinos Continue Slow Steady Gains

While Michigan awaits new opportunities in online casinos and sports betting its land-based casino industry continues to flourish.
Michigan Land Based Revenue

With no legislative progress expected on new gambling options expected until after the mid-term elections (notwithstanding a small new attempt at adding Fantasy Sports), it’s a good time to check in with the current status of Michigan’s brick and mortar casinos. The market remains on solid ground, with incremental but steady growth this year.

Tribal casinos

A dozen recognized tribes currently hold Tribal-State Compacts to operate more than 20 locations in Michigan. Overall these land-based casinos are performing quite well, generating more than a billion dollars in revenue each year for the tribes and providing millions to the state and local governments.

In 2017 the total funds generated for localities was $29.9 million. This was a 2.2% increase over the previous year, and indicates total tribal revenues of about $1.5 billion for the year.

Gun Lake Casino recently opened a new 3,500 square foot 14 table poker room, which is providing employment for an additional 60 people. Beyond the successful expansion, this should be seen as a reminder than in addition to straight tax revenue the casinos are also decent job creators, a fact which bolsters their lobbying power in negotiations for upcoming legislation.

Commercial casinos

Michigan also has seen minor improvements for the Detroit-area commercial casinos. Reports for the month of September show the three casinos combined up 1.4% over the same month last year. This also puts the revenues for 2018 so far up 2.2% over the previous year, on track to exceed 2017’s $1.4 billion total.

The exception to this was the Greektown Casino-Hotel, which experienced a small 1.8% drop compared to last September. But Greektown has the smallest share of the Detroit market, so its loss was more than offset by market-leader MGM Grand Detroit’s 3.5% gain.

It has recently been rumored that Greektown’s majority owner Dan Gilbert may be seeking to exit the casino business, but it is likely not due to any lack of profits. Even with last month’s slight decrease Greektown is still up 3.5% comparing the full third quarter of 2018 compared to 2017.

The $14.2 million in local taxes that the three commercial casinos provided to Detroit’s development also remind us why the commercial properties have a strong hand in the coming fight for sports wagering and online casinos.

Illegal betting venues

Against the current atmosphere tending towards legalization, the city of Lansing has recently taken steps to make gambling even more illegal within Michigan’s capital.

This is due to a recent spate of incidents where illegal betting rooms have cropped up in poor communities in the city. While the new city ordinance only makes creates an additional misdemeanor charge for someone running such an operation, it is hoped it will deter any criminal casinos by allowing the seizure of the operation’s funds through civil forfeiture.

Lansing is a small city with a population of just over 116,000 people, and a greater metropolitan area of about 460,000. Compare this to Detroit, which has a metropolitan area of 4.3 million (nearly half of the state population, which is why the commercial casinos there have nearly the same revenue as all the tribal operations combined).

Given this, it is unlikely that shutting down a few illegal poker rooms and dice games in Lansing will have any major effect on the rest of the state, but it still makes a difference for the local population to remove an illegal and unregulated presence that preys on the poorer population.

Image credit: Susan Montgomery / Shutterstock.com


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