The gaming industry in Detroit has most probably benefited from the two-month closure of the largest casino resort in Ontario, which is just a few miles away from properties such as MotorCity, MGM Grand Detroint and Greektown. Analysts’ predictions just became concrete as Detroit casinos reported increased revenues during the labour strike at Caesars Windsor.
Windsor’s top gaming and entertainment destination remained closed for more than 60 days after unionized workers walked off their jobs in early April. Last week, they finally reached a deal with casino management and signed a new collective contract, which resulted in the re-opening of the casino on June 7. The two-month closure, however, has apparently boosted traffic and brought in extra money to Caesars Windsor’s biggest competitors, the three casinos sitting just a few miles south, on the American side of the border. This becomes clear from the latest revenue report by the Michigan Gaming Control Board.
According to the official figures, the three casinos in Detroit generated $124.6 million in aggregate revenue for the month of May. Compared to the same period last year, when they won nearly $120 million, this is an increase of 3.9 per cent and an almost insignificant rise of 0.5 per cent from the April 2018 results. When it comes to April, the first month of a strike at Caesars Windsor, Detroit casinos reported $124 million in aggregate monthly revenue, up 2.5 per cent from April 2017.
In comparison with last year’s financial results, MGM Grand Detroit saw the biggest revenue increase of 7.6 per cent, generating $54.3 million last month, followed by MotorCity and its monthly revenue, which rose 2.2 per cent to $41.5 million. Greektown’s winnings also increased, even by a fraction only – the casino generated $28.8 million, or 0.02 increase from the results in May 2017. The rise in revenues immediately resulted in higher payments to the city – last month, the three casinos paid $10.1 million in gaming taxes, up from the $9.7 million in May 2017. The City of Detroit received $14.8 million in taxes and development agreement payments.
Detroit Casinos May Outplay Ontario’s Gaming Industry
Although most analysts do find a link between Caesars Windsor strike and the better financial results reported by the three casinos in Detroit, no explanation was provided in the official reports. According to Mary Kay Bean, spokeswoman for the Michigan Gaming Control Board, the agency does not analyze the data it receives from licensees. It is impossible to say whether the casino strike in Windsor influenced the market in Detroit, she adds. Others point out that the casino was closed for too long and as a result, many regular patrons may not be willing to return. Caesars management should consider the potential “loss of patron loyalty”, the Detroit Free Press wrote, citing financial advisor Alex Calderone.
But casinos in Detroit may just have another Ace up their sleeve, one that may help them outplay Caesars Windsor and Ontario’s gaming industry in the long term. They may soon be allowed to dramatically expand their offerings with sports betting and online gambling. On Tuesday, the Michigan House of Representatives passed a bill that authorizes Internet gambling and allows Detroit’s three casinos, as well as the state’s 23 tribal gaming facilities to offer online gaming. Before becoming a law, the bill needs to receive approval by the Senate, which would not happen before the fall when senators reconvene for the new session. Of course, the governor’s signature is also required.
Many experts believe that the bill will turn into a law and with it, Michigan will open the door to sports betting, as well. Following last month’s lifting of the sports wagering ban by the U.S. Supreme Court, most states, including Michigan, consider allowing this type of gambling. If this happens, Ontario may not have a choice but to follow suit unless it wants to be completely eliminated by its competition.