Despite recent strikes for multiple industries in Detroit, including casinos, the economic outlook for Detroit looks positive.
Earlier this week, the city of Detroit held its biannual Revenue Estimating Conference, updating the economic outlook of the city for years to come.
The report predicts that wage growth for jobs in Detroit and for the city’s residents is expected to outpace the statewide average through 2028. Unemployment rates are also expected to have a decline in the years to come after a short peak in the middle of 2024.
Altogether, the news is encouraging for Detroit businesses, including the three retail casinos, as they look to find stability after a tumultuous few years.
Detroit casinos come up $34 million shy of 2022 total in 2023
The three Detroit casinos – MGM Grand Detroit, MotorCity Casino and Hollywood Casino at Greektown – were on pace to bring in more revenue from slots and table games in 2023 than 2022.
Then, the casino workers’ strike that lasted half of October and most of November caused the yearly totals to fall about $34 million shy of 2022’s mark.
The $1.22 billion the casinos made in gaming revenue for 2023 was lower than 2021’s $1.26 billion, and that was with the casinos facing capacity limitations for most of 2021.
The 2023 Detroit casino revenue was down 15.9% from 2019’s revenue of $1.45 billion, the highest yearly total for the three casinos.
Not aiding matters is that the January 2024 revenue was just $93.9 million for the trio. It was the lowest monthly revenue total from slots and tables games since June 2005 if you exclude months impacted by the strike and the pandemic.
Prior to the strike, Detroit casinos were averaging $106.5 million in monthly revenue through slots and table games. The January mark is a big dip from that average, with no clear reason for such a drop.
Detroit payroll jobs to approach $100,000
The Detroit economic outlook included a lot of promising data.
Key figures from the report include:
- Forecasting 3,000 payroll job gains in Detroit in 2024 after 600 net job losses in 2023. Those gains accelerate to 3,800 in 2025 as interest rates fall.
- Detroit’s unemployment rate is projected to average 8.2% this year. That’s up modestly from the 7.4% rate that was expected for 2023. Detroit’s unemployment rate edges down going forward, though, reaching 7.1% by 2028. Those declines come along with growth in the city’s labor force. Detroit will reach its highest employment since 2013 by the end of the forecast period.
- Wage growth at payroll jobs located in the city averages 3.4% per year from 2024 through 2028. Wage growth for Detroit residents is a bit faster, averaging 3.7% in that time. Both measures outpace statewide wage growth in our forecast, which averages 3.0%.
These forecasts indicate the general fund revenue for the city is projected to grow by at least $28 million for each of the next four years. That includes $39.5 million growth in Fiscal Year 2025.
The forecast takes average wages at payroll jobs in Detroit to nearly $96,000 by 2028. The average wage and salary income for employed Detroit residents is projected to reach $50,000 by 2028.
Employment for Detroit residents reached levels better than the pre-pandemic days in September of 2023.
However, the strikes from the auto industry and casinos caused that to spike in October. That’s because 5,400 residents were unemployed.
In November, 4,300 of those jobs were recovered as Detroit employment continues to work back to pre-pandemic levels.
Improved Detroit economy should benefit casinos
Despite recent struggles in revenue numbers, the Detroit casinos have to be optimistic due to this report.
Increased wages and lower unemployment rates should correlate to improved business for them, theoretically. More money to spend, more money spent on leisure activities.
The casinos will likely be looking to get a revenue boost at the end of April. That’s when the NFL Draft comes to Detroit.
The yearly event will be held in Detroit for the first time. It will bring in droves of NFL fans from around the country.
All three casinos are located within walking distance of Campus Maritus Park and Hart Plaza, the featured spots for the draft.
A successful draft weekend could bring more marquee national sporting events to Detroit in the future as well.
The NFL Draft takes place April 25-27.
