Michigan Gaming Regulators Celebrate 20 Years of Revenue from Detroit Casinos

Posted on: July 18, 2017, 04:09h. 

Last updated on: July 18, 2017, 07:34h.

Casino.org Staff Writer Read More
Expertise: Commercial Gaming.

Detroit and Michigan have been on a 20-year winning streak, as three city casinos have paid them approximately $4.5 billion in taxes, according to the Michigan Gaming Control Board.

MGM Grand Detroit
The MGM Grand Detroit, along with two other casinos, has paid the city and state of Michigan approximately $4.5 billion in tax revenues since 1997. (Image: Vice.com)

The Motor City on Monday recognized the 20-year anniversary of the Michigan Gaming and Revenue Act going into effect by celebrating its positive impact.

The bulk of the money, $2.6 billion, has gone to the city for wagering taxes that pay for public services, such as hiring police officers and emergency medical responders, as well as supporting fire department programs and other economic development initiatives. The remaining $1.9 billion has gone to state education coffers.

Gaming taxes in Michigan also fund a program for problem gamblers. Since its inception in 2001, that service has aided more than 4,000 people who have voluntarily banned themselves from Detroit’s three casinos.

New Big Three for State Economy

For decades, the American auto industry was the Michigan’s primary economic driver in terms of jobs and tax revenue. But when people started buying more foreign-made cars and the three leading car manufacturers, Ford, General Motors and Chrysler, saw sales drop, lawmakers had to find ways to revitalize the state’s economy amid rampant factory closings and employee layoffs.

Proposal E, as it was called, went before voters in 1996, and passed with nearly 52 percent approval. Then Michigan Gov. John Engler signed it into law on July 17, 1997, establishing the gaming control board to handle matters of licensing and regulation.

Three approved licenses went to MGM in July 1999, then MotorCity Casino in December 1999, and finally Greektown Casino, now called Jack Detroit Casino, in November 2000. Their impact was nearly immediate, with an estimated $111 million paid in taxes in 2000.

Over the next nine years, these casinos grew from temporary sites to permanent locations. The MGM Grand Detroit opened in 2007 and featured a hotel and meeting space. MotorCity followed their lead with an expanded gaming floor and by adding a new 13,000-square-foot spa and live theater.  Greektown launched its new location in 2009, with a 30-floor tower and 100,000 square feet of gaming space.

Helping Recover From Bankruptcy

Detroit’s gaming destinations did face declining revenues starting in 2012, as new casinos opened in neighboring Ohio and Windsor, Canada. With the city deriving 16 percent of its funding from the three casino resorts, they were unable to keep city finances above water, and in 2013 Detroit filed for bankruptcy.

At the same time, Greektown Casino, which had been unprofitable since its opening, also filed for Chapter 11.

Slowly both the city and casino have pulled out of their financial duress and were able to show a significant comeback by the end of 2015. Last year, Detroit’s three casinos generated approximately $1.4 billion in gross revenue from table games and electronic games, up slightly from $1.37 billion the year before.