What Will A Post-Pandemic World Look Like For Michigan Casinos?

Posted By Matt Schoch on April 17, 2020 - Last Updated on September 4, 2020

The COVID-19 pandemic has touched nearly all parts of global life.

With all 26 casinos shut down since mid-March, the Michigan gaming landscape is no different.

But President Donald Trump is itching to get the US economy opened up, and Gov. Gretchen Whitmer has expressed hope that May 1 could present a chance to relax stay-at-home orders.

But even then, the pandemic will loom large as a factor in many parts of our daily lives, including Michigan casinos.

Short-term: Casino floors could look different

Whitmer said on Good Morning America on Friday that Michigan’s reopening will be based in part on testing, sustained decreases in COVID-19 cases and hospital capacity.

On Thursday, Whitmer announced she was part of a regional effort of governors working together to opening their economies, joining Illinois, Indiana, Kentucky, Minnesota, Ohio and Wisconsin in the pact.

Inside casinos, visitors could see extreme pre-shutdown cleaning protocols, limits in capacities, or even changes to casino floors to separate patrons.

Allen Kerridge, the interim CEO of the five Kewadin Casinos locations, told PlayMichigan last week that distancing measures could change the look of gaming floors.

“It creates a mechanism for us to think about maybe how our floors look and how we should be setting them up,” Kerridge said. “Obviously moving forward, I’m sure not just us, many properties will take a look at what their layout is like.”

In Las Vegas, there is preliminary discussions of table games dealers resuming work with masks on.

Medium-term: Online gaming could explode on arrival

The shutdowns have also spurred a push to get online casinos up and running faster than the estimated early 2021 date.

New Jersey and Pennsylvania bettors have flooded markets where legalized online gaming is up and running.

Online poker raised a record $3.6 million in total revenue for New Jersey in March, doubling February’s total. In Pennsylvania, PokerStars set a record in March with $3.1 million in revenue.

Michigan sports betting started at retail sportsbooks in Detroit last month. But when Michigan gets remote gambling operational, there could be a similar boom, especially if social distancing guidelines continue.

“The idea of online gaming is likely to become more and more attractive,” said James Hill, a professor at Central Michigan University, who specializes in Native American casino research. “Those that want to gamble but can’t are going to be introduced to online gaming and may find they like it very much.

“If I were in the land-based casinos, an increase in online gaming in general would to me be a big threat.”

Long-term: Could small Michigan tribal casinos close?

Like many different economic sectors, it’s worth pondering if there’s a doomsday scenario because of the shutdown – namely, will all casinos survive?

In addition to their voluntary closures, there are several factors that are working against Michigan’s small tribal casinos these days.

Even before the pandemic, the annual tribal gaming report issued this week by the Michigan Gaming Control Board painted a bleak picture of Upper Peninsula casino revenues.

There are 11 tribal casinos north of the Mackinac Bridge, and their 2% revenue share payments to local governments dropped 6.2% in 2019.

U.P. tribal casinos fighting the feds for stimulus

U.P. tribes are also embroiled in a fight over federal stimulus money on two fronts.

First, small casinos are fighting a Small Business Administration criteria for excluding casinos from Payroll Protection Program loans because they are high-risk or lacking in “good character.”

In addition, Michigan tribes support a lawsuit hoping to exclude for-profit Alaska Native corporations from getting a large piece of $8 billion from federal coronavirus relief funds earmarked for tribal governments.

The Midwest Alliance of Sovereign Tribes, which represents Michigan’s 12 federally recognized tribes, have signed on as a supporter of the lawsuit, which was filed by six tribes, including three in Alaska.

The exclusion of the Alaska Native corporations would leave more of the pie available for Michigan tribes.

What could fill the void if casinos close?

Michigan has had relatively quiet times in terms of casino expansion discussions since the Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians opened Gun Lake Casino in Wayland in 2011.

There appears to be nothing imminent changing about a Bay Mills Indian Community casino that was closed in Vanderbilt near Gaylord in 2011, nor a stalled project to bring a casino to Lansing by the Sault Ste. Marie Tribe of Chippewa Indians, which operates five Kewadin Casinos in the U.P.

However, Hill said any potential closures could provoke a big shakeup to Michigan’s current casino landscape.

“Will a lot of these small casinos have to close if they are not financially viable, and will anything else sprout up to take their place?” Hill said. “If some of these casinos start peeling out, will that make it attractive for someone else?

“I don’t have a crystal ball. I wish I knew that answer, but that is a possibility.

“But I don’t see that in Michigan, at least in the near future, any movement to get a large independent casino, either tribally owned or not, that doesn’t already have a geographic headquarters somewhere in the state.”

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Matt Schoch

A Michigan native, Matt has worked at newspapers in Michigan, Missouri and the Virgin Islands. A versatile sports reporter, Matt has covered sailing on the Great Lakes, cricket in the Caribbean, high school and pro playoffs, and the Olympics in Rio. He's also the host of the Locked On Pistons Podcast and producer of a documentary on Emoni Bates. A former blackjack dealer, Matt has studied the industry from all sides.

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