According to an analysis by PlayMichigan, state and local governments lost nearly $100 million in tax revenue from March 15 through June 15 as the state’s 26 casino closed due to Covid-19.
PlayMichigan Lead Analyst Dustin Gouker stated, “The closing of the state’s casinos has left a revenue hole in the Michigan budget that will be very difficult to fill. It shows just how difficult the road that lies ahead is as the state begins to recover from the Covid-19 pandemic.”
The analysis indicated the closures resulted in losses of:
- $44.6 million in tax revenue for the city of Detroit
- $44.2 million in tax revenue for the state of Michigan
- $7.5 million in revenue for local governments from the 2 percent revenue sharing payments from tribal casinos
- $375 million in revenue for Detroit-area casinos
Gouker noted, “The response to the pandemic was swift and understandable, but the toll has been significant in terms of tax revenue. And that is just one facet. Operator revenue has completely dried up, and that will have long-term ramifications, too, including job losses.”
On the positive side, several tribal casinos have reopened, although they are operating at reduced capacity and other restrictions. Governor Gretchen Whitmer has expressed hope that Detroit’s three casinos can reopen before July 4, but also with restrictions that will continue to affect revenue such as a 15 percent capacity limit and ban on smoking on the casino floor.
However, new revenue in the form of sportsbooks is expected soon. Sports betting launched on March 11, but was shut down soon after, collecting less than $600,000 in wagers over six days. Gouker said, “With the sports world figuring out a safe way to reopen, sportsbooks will be a key to Michigan’s recovery efforts.
“After three long months, a return to something resembling normal is welcome for everyone, including state and local governments and the operators themselves. If Michigan can avoid major setbacks, casino revenue will only help as the whole state recovers.”
