Detroit's three casinos, closed for COVID-19, report sharp revenue declines

Jordyn Grzelewski
The Detroit News

Detroit's three casinos — MGM Grand Detroit, MotorCity Casino and Greektown Casino — posted sharp drops in revenue in March and for the first quarter of 2020, as the state's casinos remain closed due to the novel coronavirus pandemic.

The Greektown Casino shows support and displays Detroit Strong atop its hotel as the battle against COVID-19 continues in Detroit on Tuesday, March 31, 2020

First quarter aggregate revenue for the three casinos was down 18.5%, to $299.2 million, from the first quarter of 2019, according to a report released Tuesday by the Michigan Gaming Control Board. For the month of March, aggregate revenue plummeted 59.1% from a year ago to $57.4 million.

The downward slide in casino revenue and wagering taxes comes as Mayor Mike Duggan used his daily COVID-19 briefing Tuesday to confirm the city expects to run an estimated $100 million deficit this year, necessitating "painful cuts" — after years of balanced budgets required by the city's historic bankruptcy.

The casinos have been closed since March 16 to help stop the spread of COVID-19, the disease caused by the coronavirus. Although initially ordered to close for two weeks, the executive order from Gov. Gretchen Whitmer's requires the casinos to remain closed through April 13.

The revenue losses impact not only the casinos, which have laid off thousands of employees, but the city and state, which collect hundreds of millions of dollars in tax revenue from the three casinos' more than $1 billion in annual revenue.

Last year, Detroit's casinos paid $117.8 million in gaming taxes to the state and $184.2 million in wagering taxes and development agreement payments to the city, The Detroit News reported.

In March, the three casinos paid $4.7 million in state gaming taxes, down from $11.4 million last March, the gaming control board reported. The casinos submitted $6.8 million in wagering taxes and development agreement payments to the city, down from $16.7 million in March 2019.

Last year, total revenue from Detroit's casinos set a new record of nearly $1.5 billion. That was before the legalization of sports betting, which launched March 11 and was off the ground for just a few days before professional sports leagues shut down because of the pandemic.

The gaming control board, which regulates the Detroit casinos, reported $105,548 in qualified adjusted gross receipts from sports betting at the three casinos between March 11 and March 16. The casinos paid $3,990 to the state and $4,876 to the city in retail sports betting taxes.

MGM Grand Detroit collected $84,695 from sports betting; MotorCity Casino collected $4,949; and Greektown Casino collected $15,904. The Michigan Treasury Department earlier this year estimated that sports betting would bring in about $19 million in new revenue annually to the state.

For the quarter, revenue at MGM Resorts-owned MGM Grand, the city's largest casino, slid 19.7%. For the month, it plunged 59.6%. Revenue at MotorCity Casino, owned by Little Caesar's Pizza co-founder Marian Ilitch, dropped 18% for the quarter and 58.7% for the month.

And Greektown saw revenue fall 16.7% for the quarter and 58.7% for the month. But the casino owned by Penn National Gaming Inc. is providing 40 free hotel rooms to first Detroit police, firefighters and EMTs amid the virus. 

The casino shutdowns are among many steps the state has taken to help stop the spread of COVID-19, including shutting down schools, ordering non-essential businesses to close, and banning large gatherings.

Michigan — and the southeast corner of the state in particular — has become a hotspot for the highly-infectious virus, its total cases ranking third nationally behind New York and New Jersey. As of Tuesday, the state was reporting 18,970 confirmed cases of COVID-19 and 845 deaths.

All of the state's 26 casinos, the rest of which are tribal casinos not regulated by the state, are closed. Nearly all of the 1,000 casinos in the U.S. were closed as of April 1, affecting nearly 652,000 workers, according to the American Gaming Association. The association is projecting a $43.5 million hit to the economy if casinos remain closed through mid-May.