Detroit casinos see potential in sports betting
The busiest part of Las Vegas casinos on Sunday afternoon aren’t the slots, craps, roulette or blackjack. It is the sportsbook, where people bet on pro football games.
At any given casino, hundreds of gamblers watch the games on dozens of giant LED screens, casino officials said. The auditorium at Westgate Casino is so large it passes out maps for the best viewing spots for a particular game.
If gambling supporters have their way, such a passionate pursuit could come to Detroit within two years, gaming experts said.
The issue could be controversial because some Detroit casinos are owned by people with ties to sports teams, and it’s not clear if that would affect sports betting.
MotorCity Casino is operated by Marian Ilitch, whose family owns the Tigers baseball and Red Wings hockey teams. Greektown Casino is owned by Dan Gilbert, who also owns the Cleveland Cavaliers.
Gambling supporters were buoyed by a U.S. Supreme Court hearing last week that discussed a federal law that prohibits sports gambling outside Nevada. During oral arguments, most of the justices seemed wary of the ban.
The court could issue a decision by June.
“I would love it,” said Larry Weil, a Taylor resident who was playing poker Thursday at MotorCity Casino. “I wouldn’t have to do it in Vegas. I could do it right here.”
If the three casinos in Detroit open sportsbooks, it could bolster their rebounding revenues, gaming experts said.
After Ohio opened casinos in 2012, including in nearby Toledo, business in Detroit tumbled for two years before rising the next two. The revenue from Detroit’s three casinos in 2016, $1.3 billion, remains below the 2012 level, $1.4 billion.
Sports betting potential
In 2017, 12 million to 15 million Americans bet illegally on sports with bookies and offshore sites, which earned $3 billion in revenue, according to an estimate by Eilers & Krejcik Gaming, a gambling research firm in Santa Ana, California.
And more gambling profits would mean more money for depleted city and state government coffers, gaming experts said.
“The sports betting customer is likely different than the typical casino customer,” said Chris Grove, managing director of Eilers & Krejcik. “It would create new customers and new revenue for casinos.”
The impact on casinos that own pro sports teams is unclear, experts said. One possibility is the gambling palaces wouldn’t be allowed to accept bets on the team it owns.
Major League Baseball prohibits team owners from operating casinos.
The league allowed Marian Ilitch to own MotorCity after she said she had nothing to do with the family’s operation of the Tigers. The baseball team was headed by husband Mike Ilitch and now by their son Chris Ilitch.
A spokeswoman for MotorCity Casino declined comment.
A Greektown executive said it would be premature to discuss possible regulations because the court case hasn’t been resolved.
“Under the right and thoughtful regulatory framework, we generally support legalization of sports betting,” said Matt Cullen, chief executive of JACK Entertainment, which runs Greektown.
Detroit’s other casino, MGM Grand, said it would welcome sports gambling.
“Our company’s longstanding position is that sports betting should be legalized outside of Nevada in those states that choose to offer it,” spokeswoman Mary Hynes said in a statement.
The Supreme Court case involves the Professional and Amateur Sports Protection Act, which was passed in 1992. Supporters of the gambling ban said it protects the integrity of the sports contests.
The case stems from a challenge to the law by New Jersey, which is trying to revive its long-flagging casinos.
Michigan poised to act
If sports betting is allowed, Michigan would likely be among the first wave of 14 states to offer it, according to Eilers & Krejcik Gaming.
Its estimate is based on various factors, including whether a state has pending legislation, constitutional obstacles against it and how badly the state needs money.
Michigan is one of 15 states where legislation has been introduced to legalize sports betting if the federal ban were overturned, according to the American Gaming Association in Washington.
State Rep. Robert Kosowski, D-Westland, who proposed the Michigan bill in January, told The Detroit News he was standing in line at a convenience store when another customer bought $293 in lottery tickets. The clerk told him the customer made the same purchase every day.
Kosowski said he was flabbergasted Michiganians can spend thousands of dollars on lottery tickets but can’t drop a $20 bet on the Detroit Lions.
“It looks like gambling to me,” he said about the lottery. “Something doesn’t make sense there.”
Adding to the folly, Kosowski said, is that locals can take a three-minute drive across the Ambassador Bridge and bet legally on sports at Caesars Windsor Casino. So those bettors end up spending their eating and drinking and gambling money in another city, not Detroit, he said
Even if the Supreme Court upholds the federal ban, proponents of sports gambling argued it will be legalized in the not-too-distant future. They said times have changed since the rule was implemented 25 years ago and that gambling has become more acceptable across the country.
Support for a repeal of the ban seems to be gaining favor in Congress, said Dennis Gutwald, a Las Vegas attorney who specializes in gaming law.
“Sports and sports betting just go together and always have,” he said.
Even the pro sports leagues seemed to be softening their opposition to gambling, Gutwald said. Fantasy sports leagues have shown that betting fans become more engaged with the leagues.
National Basketball Association Commissioner Adam Silver wrote a commentary in the New York Times arguing for the legalization of sports gambling.
A new National Hockey League team, the Golden Knights, this year began playing in Las Vegas. The Knights will be joined by the National Football League’s Oakland Raiders when their stadium is completed in two or three years.
Sports betting is already widespread, proponents said. So states should make it legal so it can be regulated and raise money through taxes.
The latter is especially needed in Michigan, Kosowski said.
Revenue sharing hasn’t been fully funded since 2000, he said. As a result, fewer cops and firefighters are on the street, fewer streets are being repaired and recreation programs are being reduced.
Kosowski doesn’t want to raise income taxes and doesn’t want to increase a gas tax that already is among the highest in the nation. And, thanks to sports gambling, he doesn’t have to.
“It seems like an easy answer,” he said.
He’s not a big gambler himself, just making an occasional wager on the Super Bowl.
An analysis of Kosowski’s bill by the Michigan House Fiscal Agency found that sports betting comprises 2 percent of the gambling revenue in Nevada.
Using that as a guide, sports betting would have boosted the amount Michigan received in gambling taxes last year from $112 million to $114 million, and Detroit’s share from $175.5 million to $179 million. But the proposed legislation faces an uncertain future in the Republican-run Legislature.
Gutwald said states are in no position to be turning down money.
“It’s a lot of upside for those entities (that offer sports betting), which, in turn, will likely lead to more tax revenue for the states,” he said.