After a flourish to end the summer, the fall began as a bummer for gaming facilities in Michigan. September Detroit casino revenue was diminished by a downturn at the MGM Grand Detroit.
Although Greektown Casino actually improved on its month-over-month numbers, the overall picture was grim. Detroit’s three commercial casinos altogether posted their second-worst month of 2019.
The skinny on the lean September Detroit casino revenue
Total revenue from Greektown, MGM Grand and MotorCity casinos in September was over $112.29 million. Only Greektown was up from August at $26.91 million.
Greektown’s improvement was only 0.04%, however, but it ranks as the fourth-best month of 2019 so far at that casino. That very slight increase was overshadowed by diminished returns elsewhere.
MotorCity’s $38.88 million was down nearly 3% from August. Revenue at MGM Grand ($46.49 million) fell almost 13% month-to-month.
September was the worst month of the year at MGM Grand so far. At MotorCity, only January and February were worse than September.
Because of those results, only January ($112.08 million) was a worse month for Detroit’s three casinos. An annual comparison shows September revenue falling like leaves isn’t abnormal.
September isn’t normally a bumper month anyway in Detroit
In 2018, September’s revenue was down from August as well. Detroit’s casinos took in over $120.48 million in August of last year.
The following month that figure fell to just under $115.23 million. The 4.4% decline from August 2018 to September 2018, however, was less than 2019’s 7.4% difference from the same two months.
While a downturn for September isn’t anything new, the 3% difference in year-over-year revenue isn’t a trend in the right direction. It could be used as data to support gambling expansion legislative initiatives.
The legalization of online slots, online table games and sports betting is on the table. That could increase revenues not only for Detroit’s three casinos but the city of Detroit and Michigan as well.
iGaming and sports betting could be game-changers
If and when Michigan legalizes iGaming and sports betting, that could mean new revenue streams for Detroit’s casinos. The former would be much more so than the latter.
Sportsbooks aren’t high-profit operations. That could especially be true if the state imposes a high tax rate on sports betting revenue.
Online slots and table games have a track record of being much more profitable in other states. The popularity of Michigan online lottery acts as proof of concept for such games in the Wolverine State.
Despite the potential boon for casinos that iGaming could represent, it’s perhaps less likely to become legal than sports betting. Rep. Brandt Iden, who sponsors separate bills to legalize both activities, seems less optimistic about his iGaming bill.
Most of the Iden’s concerns revolve around Gov. Gretchen Whitmer’s support. Iden and Whitmer are at odds with each other over tax structures for gambling expansion.
Until he feels he has the governor’s support, Iden is holding both bills in committee. He’s walking a fine line currently.
If he increases the tax rate on iGaming and/or sports betting to get Whitmer’s support, he risks losing the support of others like the Detroit casinos for his bills. High tax rates would cut into the profitability of both activities for casinos.
If the numbers jibe, iGaming and sports betting could help boost falling revenues at the three Detroit casinos. That’s not something they can depend on right now, however. All three operators need to look to other methods to keep their margins from decaying like leaf beds on the ground.