The Detroit casino workers’ strike is nearing two weeks with no indication of an end in sight. Numbers are being thrown around that need some fact-checking.
At the forefront of the dispute is the revenue that the MGM Grand Detroit, MotorCity Casino and Hollywood Casino at Greektown made in 2022.
The Detroit Casino Council touts a record year, but doesn’t give the full picture.
The casinos are crying foul of the DCC’s number, but also leaving out some key information of their own in regards to employment numbers.
As these things tend to go, the truth lies more in the middle. Let’s do some fact-checking.
How much did Detroit casinos make in 2022 revenue?
The Detroit Casino Council has driven home that the Detroit casino industry generated a record $2.27 billion in gambling revenue in 2022. It’s a number that has made the rounds in most media covering the strike.
It’s unclear how the DCC reached that number, but it does not seem to fully encapsulate the situation.
With the launch of online casinos and online sports betting in January of 2021, there are a lot of different revenue sources for gambling in the state of Michigan.
Let’s do some fact-checking of the numbers.
Detroit casinos generated $1.28 billion in 2022 revenue
The first and most important is revenue for slots, table games and poker inside the three casinos. In 2022, the three combined for roughly $1.26 billion in revenue under that category. The exact number is $1,256,974,741.68
The next retail number to factor in is retail sports betting revenue. Between the three casinos, they generated roughly $19.1 million in revenue for 2022. The exact number is $19,070,263.88.
When combining the two, that equates to roughly $1.28 billion in commercial revenue for 2022.
Detroit casinos’ online partners had $1.18 billion in 2022 revenue
Next we move to online casinos and online sportsbooks.
In 2022, the three online operators combined for just under $900 million in Michigan online casino revenue. The exact number is $899,714,733.48.
For Michigan online sports betting, the three combined for roughly $285 million in revenue. That exact total is $285,013,504.85.
When combined, that gives us about $1.18 billion.
Fact: If combining the total retail revenue and online revenue, the total is actually about $2.46 billion.
Fact-checking: Online revenue not directly tied to Detroit casinos
Certainly if you add in online revenue, it appears as if Detroit’s casinos had a record-breaking year in 2022.
However, that wouldn’t be accurate.
Detroit casinos see marginal returns from the online revenue, as the partnerships are heavily tailored to the online operators.
Yes, each casino sees a percentage of the overall revenue, but that percentage is not known. However, it is expected to be quite slim.
What is true is that the online revenue does go to the parent company of MGM Grand Detroit (MGM Resorts International) and the parent company of Hollywood Casino at Greektown (PENN Entertainment).
MotorCity Casino, which is owned by the Ilitch family, has no ownership in Flutter, which owns FanDuel.
The DCC can certainly tout that the online revenue is tied to the parent companies of two of the three casinos, with whom they are having negotiations.
Conclusion: It’s unlikely Detroit casinos had record revenue in 2022
Prior to the pandemic and the start of online gambling, the three Detroit casinos recorded just over $1.45 billion in gaming revenue in 2019. That was the most the Detroit casinos have ever had in revenue.
In 2021, the Detroit casinos had $1.29 billion in revenue through commercial gaming and sports betting, slightly ahead of the 2022 total.
When looking at the 2022 numbers, we can get an idea of what kind of online share these Detroit casinos would need to get in order to truly hit a record revenue year.
The collective online revenue through iGaming and sports betting for BetMGM, FanDuel and Barstool was just over $1.18 billion. To set a baseline, let’s imagine the Detroit casinos receive an extremely low cut of that revenue — just 1%. That translates to $11.8 million going to the Detroit casinos from online sports betting.
For the Detroit casinos to match the 2019 record of $1.45 billion in revenue, it would need to receive a collective $170 million in online revenue. That means the three Detroit casinos would need to receive 14.4% collectively of the online revenue.
To hit the $2.27 billion mark that the DCC has touted, the Detroit casinos would need to collectively receive 84% of the online revenue.
The Detroit casinos are definitely not getting 84% of the online revenue. It’s reasonable to believe that they are not getting 14.4% either, but that is much more realistic than 84%.
Detroit casino staffing decline greater than revenue drop
The Detroit Casino Council may not be fair with the revenue number they are attaching to the Detroit casinos. However, the Detroit casinos are also overlooking numbers of their own.
Prior to the pandemic, the US Bureau of Labor Statistics lists the Detroit casino hotel employment at 6,800 as of February 2020. This was coming off the record commercial revenue year in 2019.
As of July 2023, that employment number is 4,900. A drop of 30.4% in staffing overall.
If we don’t factor in any online revenue for the Detroit casinos. The dip of $1.45 billion in commercial revenue in 2019 to $1.28 billion in 2022 is just 11.7%.
The commercial revenue loss is certainly not matching the Detroit casinos’ drop in employment.
In 2020, the casino workers agreed to a three-year contract extension with a 3% wage increase in order to aid the casinos in recovering from the pandemic.
It’s fair to say the casinos have recovered. While they may not be where they were in 2019, the revenue-to-worker ratio is now much more in favor of the Detroit casinos.
With $1.5-2.5 million being lost a day for the Detroit casinos, getting this strike resolved should be an urgent matter.