Now that U.S. Bankruptcy Court Judge Steven Rhodes has approved Detroit’s plan to exit the biggest municipal bankruptcy in U.S. history, the city can direct less casino revenue toward its debt, which totaled billion before the plan. That’s good news considering casino tax proceeds, accounting for 14 percent of all money the city receives, has dropped from 7 million in 2011 to 1 million in 2012. Figures for 2013 are not yet available.
According to Michigan Gaming Control Board numbers, combined first quarter 2014 revenue for MGM Grand Detroit, MotorCity Casino Hotel and Greektown Casino-Hotel dropped 11 percent compared to 2012, the final full quarter before Hollywood Casino in Toledo, Ohio opened. In the first quarter of this year, gambling proceeds declined a combined 5.9 percent to $331.6 million, compared with 2013. For the full year of 2013, combined revenue from the three casinos dropped 4.7 percent to $1.35 billion versus 2012. But the most alarming numbers occurred in March, when revenue dipped 7.3 percent versus 2013.
Lansing-based gaming consultant Jacob Miklojcik said the terrible winter weather that kept players at home could be a factor in the declining numbers. However, the decreasing numbers also could be the result of additional gambling opportunities plus changes in consumer behavior. “You would hope that this is deferred money, not lost money,” Miklojcik said. He added customers also have more gambling choices, including charity poker games, keno at bars and illegal online gambling.
Regional casinos have reported declining revenue for a couple of years, gambling experts said. At Ohio’s four casinos, revenue was down 5.7 percent in the first quarter compared to 2013. In Indiana, casino revenue dropped 16 percent for the same period.
Tim Wilmott, chief executive officer at Penn National Gaming, owners of Hollywood Casino in Toledo and Columbus, Ohio, said the customer who typically spends $100 at most per visit now is spending less. “I do think more than anything else it’s the pressure they’re feeling on their own budget that’s affecting their spending with us and others in this industry,” Wilmott said.
