According to the Michigan Gaming Control Board’s latest filings, Michigan’s three commercial casinos generated $1.4 billion of gaming revenue in 2017. That tally bettered the $1.385 billion the three casinos captured during 2016 by a modest 1.1 percent.
Most of the revenue (81 percent) was funneled through the casinos’ slot machines. Slot revenue outpaced table game revenue by more than a four-to-one margin in 2017: $1.14 billion compared to $260 million.
Those numbers don’t include revenue from Michigan’s 23 tribal casinos. The MGCB reports only on revenue from the three Detroit-area commercial casinos:
- MGM Grand Detroit
- MotorCity Casino
- Greektown Casino
All in all, it was a pretty steady year for all three gaming operators. None posted a Y/Y decline, though MGM Grand Detroit came close, nor were the increases noteworthy.
Here’s a look at the revenue reported by each casino property:
- MGM Grand Detroit’s revenue was flat Y/Y. The city’s top casino posted $592.2 million in 2017 revenue.
- MotorCity Casino had a solid year, with revenue increasing 2.3 percent to $478.6 million.
- Revenue at Greektown Casino went up 1.3 percent to $329.7 million.
The state and city get their cuts
Of the $1.4 billion, more than 20 percent ($290 million) went to the state of Michigan and city of Detroit.
Collectively, the three Detroit casinos sent $113 million of their revenue to the state in the form of gaming taxes.
In addition to their state obligations, the three casinos also send a significant chunk of their revenue to Detroit. In 2017, those taxes and development payments amounted to $177 million.
What if they offered online gambling?
No matter how modest, a Y/Y increase is always a good thing. But the bigger takeaway for Michigan’s commercial casino industry is the revenue it’s missing out on.
Michigan legislators have made several attempts to legalize online gambling over the last two years, but each try derailed.
As a point of comparison, New Jersey online casinos generated nearly $250 million in 2017 without any signs of cannibalizing land-based gaming. In fact, after a decade of decline, land-based casino revenue in Atlantic City rose for the second consecutive year.
With a similar population, and with legislation calling for similar tax rates, Michigan could expect similar returns. If Michigan online gambling generated the same revenue numbers as New Jersey’s in 2017, the three Detroit casinos would have seen a collective revenue increase of 16 percent Y/Y, not the 1.1 percent they actually experienced.
Even if the state saw more modest revenue from online gambling (New Jersey generated $123 million in its first year), it would still represent a nine percent Y/Y bump.