Detroit Casino Revenue Down 6.1% in FebruaryMarch 20, 2018 10:52 am
After posting a slight 0.5% loss in January, Detroit’s three casinos have now seen their year-over-year revenues plunge by a further 6.1% to $110 million in February, according to the latest figures released by the Michigan Gaming Control Board. As a result, Detroit’s casino market is now currently lower by 3.3% versus the first two months of 2017.
All Casinos Post Losses
In February, all of Detroit’s casinos posted year-over-year losses, with Greektown Casino experiencing the sharpest decline with its revenues falling by 9.3% to $25.9 million. Meanwhile, MotorCity Casino Hotel saw its business contract by 5.6% to $38.3 million, while the City’s biggest casino, MGM Grand Detroit, generated 4.7% less revenues at $45.8 million.
Consequently, MGM controlled a 42% share of the market last month, followed by MotorCity with a 35% share, and Greektown with a 23% share. All three venues subsequently paid a collective $8.9 million by way of gambling taxes, down by 6.3% from last February, with the city of Detroit also receiving a further $13.1 million in wagering taxes and development agreement payments.
Greektown Rebranding Delay
While Detroit’s casinos gets off to a lackluster start to 2018, there are hopes that the Greektown Casino-Hotel’s renovation and rebranding, which is expected to be completed at the end of summer, may help to grow the market. The venue had originally intended to become the Jack Detroit in May, but the process has now been put back slightly in order to “integrate and facilitate industry leading technology and ensure a higher quality and rewarding experience for our guests,” according to Jack Entertainment CEO Matt Cullen. This includes facilitating a more streamlined integration of its loyalty-rewards program.
The property was acquired by Jack Entertainment in 2013, which is owned by Dan Gilbert, the founder and chairman of Rock Ventures LLC, which runs other casinos in Cleveland, Cincinnati and Baltimore, as a well as horseracing venues in Ohio and Kentucky. The company hires around 7,000 employees, and last year generated over $1.2 billion in revenue.
Amongst the numerous renovations and developments taking place at the operator’s Detroit property will be the placing of 1,500-new signs inside and outside of the 30-story building, including a beacon on its roof capable of changing colors and displaying animations. It will also feature a food court area named the Monroe Market, complete with seven new restaurants offering a selection of food and fine wines.
“These unique new dining experiences deserve a grand opening of their own,” Cullen remarked.
Revenues Up 1.1% in 2017
In 2017, Detroit’s casino industry generated $1.4 billion in revenues, marking a 1.1% improvement over the previous year, with slot machines contributing $1.14 billion of that amount, and table games the remaining $260 million. This then resulted in $177 million by way of wagering taxes and development agreement payments for Detroit City, and a further $113 million in gaming taxes for Michigan state.
In addition to Detroit’s three casinos, Michigan houses an additional 25 gaming properties, the majority of which are owned by Native Tribes. According to an agreement signed with the state, they subsequently contribute taxes of 2% of their net winning to local governments, which from 1994 to 2013 amounted to $350.1 million.
According to the Michigan Gaming Control Board, MGM collected $592.2 million last year, which was mostly flat versus the previous year, followed by MotorCity Casino up 2.3% at $478.6 million, and Greektown up 1.26% to $329.7 million. As a result, MGM commanded a 43% share of the market in 2017, followed by MotorCity (34%), and lastly Greektown (23%).
Annual Casino Results
Detroit’s casino revenue posted in 2017 is not far off the peak recorded in 2012 of $1.42 billion, with the City’s market now having returned growth over the past three consecutive years. One of the factors contributing to its initial decline was increased competition from neighboring states such as Ohio, which currently hosts four brick-and-mortar casinos. Last year, it then generated combined revenues of $819 million, up by 2.6% from the $798 million collected a year earlier. Leading Ohio’s casino market last year was Hollywood Columbus with $221 million in revenues, followed by Jack Cleveland ($201m), Hollywood Toledo ($198.6m), and Jack Cincinnati ($197.6m).
In February, Ohio’s casino market also posted a slight 0.6% revenue increase to $67.6 million, while its racinos noted a 1.5% increase to $79.5 million, despite Belterra Park shutting its operation for a fortnight due to the Ohio River flooding.