Go straight to the content.
Please rewrite the prompt or provide more context for me to be able to help you.
In 2021, when Michigan online gambling was introduced, a significant concern arose: Would the popularity of online casinos lead to a substantial decline in activity on the casino floors in Detroit?
After analyzing nearly a year’s worth of detailed data, it seems that the answer is: There is only a small difference, if any at all.
Despite the ongoing presence of COVID-19 and the perceived threat from online casinos, Detroit’s land-based casinos managed to weather the tough times brought on by the pandemic quite well in 2021.
The truth is that the revenues generated by Detroit casinos, as well as the tax revenue collected by the state, are maintaining a relatively stable position.
Detroit casino revenue down slightly
Let’s shift our focus to Detroit as the state’s 12 federally recognized tribes do not publicly disclose their retail casino revenue.
Since their establishment in the late 1990s, the trio of gambling establishments located in Michigan’s biggest city, namely Greektown Casino, MGM Grand Detroit, and MotorCity Casino, have become indispensable sources of revenue for both the state and the city.
Michigan online casinos were launched on January 22, 2021, following a challenging year for the trio.
Let’s take a glimpse at the statistics comparing 2021 to 2019, which was the most recent “normal” year for Detroit’s casinos before the COVID-19 pandemic altered the landscape.
| 2019 revenue total | 2021 revenue total | 2019 state wagering tax | 2021 state wagering tax | |
|---|---|---|---|---|
| MGM Grand Detroit | $623,515,060 | $554,029,734 | $50,504,720 | $44,876,408 |
| MotorCity Casino | $493,566,673 | $438,271,651 | $39,978,900 | $35,500,004 |
| Greektown Casino | $337,192,961 | $274,461,146 | $27,312,630 | $22,231,353 |
| Totals | $1,454,274,694 | $1,266,762,531 | $117,796,250 | $102,607,765 |
The numbers indicate that the casinos generated a revenue of $1.45 billion in 2019, which slightly declined to $1.27 billion in 2021, reflecting a 12.9% decrease. Additionally, the state witnessed a reduction of $15.2 million in tax revenue.
That’s quite evident, but not excessively concerning.
In terms of Detroit’s city tax revenue, there was a decrease from $184.2 million in 2019 to $160.8 million in 2021, resulting in a decline of $23.4 million or a 12.7% decrease.
COVID still biggest hurdle for Detroit casinos in 2021
The COVID pandemic has emerged as the most significant event of the early decade, and this fact is reinforced by the state of Detroit casinos.
Throughout the entire year of 2019, the patrons of the three Detroit casinos faced no interruptions or restrictions that hindered their access.
Detroit casinos were first shut down on March 16, 2020, in response to the pandemic. They remained closed until August 5, at which point they were allowed to operate at only 15% capacity. Unfortunately, due to another surge in cases, the casinos were forced to close again from November 18 until December 20.
During the initial six months of 2021, all three casinos had to adhere to capacity restrictions, resulting in revenue figures below $90 million in January and February. The majority of this decline occurred prior to the launch of online casinos. In comparison, January of 2019 recorded the lowest revenue for that year at $112 million.
June 22 of this year marked the removal of capacity restrictions, leading to July becoming the highest-earning month of 2021 with a revenue of $115.7 million.
AGA: Mask requirements, capacity restrictions among nation’s toughest
Furthermore, in November 2021, two Detroit casinos reinstated the mandate for wearing masks, resulting in the deterrence of certain customers.
Michigan’s strict regulations on Detroit casinos were highlighted by the American Gaming Association as some of the most rigorous in the country.
The AGA stated to Playinmichigan that although Michigan experienced a decrease in traditional gaming revenue, it is premature to solely attribute this fluctuation to the introduction of sports betting and iGaming, particularly when considering the ongoing pandemic.
In 2019, numerous states experienced a decline in traditional gaming revenue, regardless of whether they had sports betting and iGaming. This decline was particularly evident in states like Illinois (-12.3%), New Mexico (-11.2%), and Michigan (-12.9%), which were affected by ongoing casino capacity restrictions. Interestingly, Detroit casinos faced the most extensive and enduring capacity restrictions compared to other markets. It was not until late June that these restrictions were finally lifted, allowing them to operate at a maximum capacity of 30%.
Online casinos have more than made up the difference
Although several factors may contribute to the fluctuations between 2019 and 2021, it is important to note that there is no cause for concern.
The casino industry has valid reasons to doubt the reports of online casinos causing provincial losses, as we have observed the concerns expressed by our friends in Ontario, Canada.
According to Tuesday’s report, the online casino earnings in Michigan for the year 2021 totaled $1.11 billion. These earnings resulted in $201.7 million being generated in state taxes and an additional $55.3 million in city taxes.
In 2021, the combined state tax revenue generated from Detroit casinos and online casinos exceeded $300 million, representing a remarkable 60% increase compared to the wagering tax figures in 2019, before the introduction of online casinos.
Despite a decline in casino revenue, Detroit managed to generate an additional $32 million in tax revenue from both land-based and online casinos.
National numbers still rising despite more online gambling
Despite the increasing popularity of online casinos and sports betting nationwide, the commercial industry remains unaffected.
The AGA reports that commercial brick-and-mortar gaming saw a growth of 6.4%, generating $41.08 billion from January to November 2021, compared to $38.62 billion during the corresponding period in 2019.
Despite the rise in online casinos and sports betting, these numbers indicate that the commercial industry remains robust.
What can we project for 2022?
Online casinos and sports betting have proven their permanence, as 2021 has revealed.
The industry is expected to witness a surge in innovation and creativity due to the impressive record numbers achieved this year, which will attract new users. Both online poker and live-dealer gaming will experience significant growth in the coming year.
However, the brick-and-mortar casino industry will continue to make efforts to sustain a dependable foundation.
Casinos consistently offer promotions, shows, and hotel packages as incentives for visitors. With optimism that the pandemic will gradually subside after the recent Omicron surge (keeping our fingers crossed), casinos and resorts might experience yet another thriving summer.
Predicting when the pandemic will largely be behind us is a challenging task. Equally challenging is envisioning the post-pandemic world and how it will shape our lives. Certain health restrictions might become a permanent part of our new reality.
It is evident that there is still a strong demand for the traditional casino experience, and this desire is expected to increase as the pandemic subsides.
Despite the rapid growth of the online industry, the state and city of Detroit continue to experience numerous benefits and positive outcomes in terms of financial gains.
Please rewrite your request or provide more information for me to assist you.
Related Articles
Please rewrite your request and provide more specific information so that I can better assist you.