Detroit Casinos Reopening At 15% Capacity, But Is That Number Sustainable?

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There were a few catches when Gov. Gretchen Whitmer announced last week that Detroit’s three casinos could reopen this week.

The primary focus is on a capacity restriction of 15%, which is the lowest in the entire country.

The reopening of Greektown Casino-Hotel, MGM Grand Detroit, and MotorCity Casino will contribute to the much-needed revenue growth for a city in need.

“In her order, Whitmer stated that casinos have been successfully running in numerous parts of the country and tribal areas in Michigan, and therefore, they should be permitted to continue operating in the Detroit region as well.”

Due to the COVID-19 pandemic, the Detroit casinos shut down on March 16. However, most of the tribal casinos in the state have already resumed their operations, with one exception. Governor Whitmer has granted permission for the casinos to reopen at 10 a.m. on Wednesday.

The opening dates have been revealed by various casinos. MGM Grand is set to open on August 7. Greektown has announced on Twitter that it anticipates opening on Wednesday. MotorCity also plans to open on the same Wednesday.

Michigan casinos laying off employees during coronavirus

Jocelyn Kelly from MGM informed Playinmichigan on Thursday that the imposed restrictions would limit the number of patrons on the casino floor to approximately 1,800. Inquiries regarding capacity restrictions from MotorCity and Greektown representatives went unanswered.

In a recent letter, a MotorCity representative expressed the challenges faced by the company due to the restrictions imposed by the Michigan Gaming Control Board last month. The letter also announced the unfortunate news of extended layoffs affecting 2,554 employees.

David Turner, the casino and hotel’s vice president of human resources, expressed dissatisfaction with the provisions and delays in reopening by signing a Worker Adjustment and Retraining Notification Act notice.

The letter states that due to the restrictions outlined in those guidelines, we have determined that our operational capacity will be significantly diminished. Consequently, we made the decision in the previous month that only approximately half of our Associates will be required upon reopening, and we have no means of predicting when we will be allowed to expand our operations sufficiently to bring back the remaining employees.

In the letter, it was explained that MotorCity Casino would cease providing benefits to the laid-off employees once July came to an end on Friday.

Other states have higher capacity limits

While several states throughout the nation are implementing capacity restrictions on casinos, none are as stringent as those in Michigan.

Casinos in Pennsylvania and Illinois are operating at a capacity of 50% while in New Jersey, they are functioning at a 25% capacity.

In Louisiana, the capacity limit initially stood at 25%, but it was subsequently relaxed to 50% for the subsequent phase.

Last week, the Supreme Court issued a ruling that determined Nevada’s ability to impose a 50-parishioner limit at churches while permitting casinos to operate at 50% capacity.

According to Jacob Miklojcik, a gaming consultant from Lansing, most casinos do not operate at full capacity.

“It’s an integral component of the city’s economy,” Miklojcik emphasized. “The casinos will not only contribute through gaming tax, but also through business services tax, property taxes, and various other taxes. However, it’s a risky venture.”

How much will 15% capacity hurt casino business?

To maximize revenue, the Detroit casinos aim to attract a large number of players.

Determining the exact impact of capacity restrictions on business is challenging.

Undoubtedly, there exists a considerable desire for casino gambling in the area. However, numerous players, especially the elderly population, may choose to avoid these public establishments as long as the pandemic continues to pose a threat.

Two analysts with differing opinions were interviewed by The Detroit Free Press regarding the restrictions.

Casino and tax revenue will continue to experience prolonged hardship, warns Alex Calderone from Birmingham’s Calderone Advisory Group.

Generating similar revenues is nearly impossible unless each individual who enters the premises participates and experiences a greater number of losses, surpassing their typical frequency by five or six times.

Casinos reopening as state still fights COVID-19

After a decline in mid-June, Michigan is currently experiencing approximately 600 fresh coronavirus cases on a daily basis.

The current daily death counts in the Detroit area are much lower compared to the peak in March and April when the virus had a severe impact. Additionally, Governor Whitmer’s recent order limits indoor gatherings to 10 individuals and temporarily shuts down indoor bars in northern Michigan.

Whitmer emphasized the importance of remaining vigilant as COVID-19 cases surge, stating, “With the rising cases, Michiganders cannot afford to let their guard down. It is crucial that we take every necessary measure to safeguard lives, support our courageous frontline workers, and prevent our healthcare system from becoming overwhelmed as we persist in our fight against COVID-19.”

In light of the increasing number of COVID-19 cases linked to social gatherings throughout the state, it is imperative that we impose additional restrictions on gatherings in order to safeguard the well-being of our community and economy. By implementing these stringent measures, we will enhance our ability to safely reopen schools and prevent the potential onslaught of a catastrophic second wave.

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