Closed Detroit Casinos Down 39.2% In 2020; Fantasy Contests Helped State

Can you please rephrase your request?

The Michigan Gaming Control Board released year-over-year figures on Tuesday, detailing the performance of Detroit casinos in the first four months of 2020, as there was no revenue to report specifically for April.

As anticipated, the outcomes were gloomy.

Due to the COVID-19 pandemic, the three casinos experienced a significant decline in revenue of 39.2% during the first four months of 2019, as they remained closed since mid-March.

In addition, the board highlighted that the state received over $240,000 in fantasy contest revenues during the initial three months. However, this amount pales in comparison to the significant losses incurred by the state due to the closure of casinos.

Tough numbers for struggling sector, governments

In the first four months of last year, Greektown Casino-Hotel, MGM Grand Detroit, and MotorCity Casino collectively generated $492.1 million in revenue. However, this year, their combined revenue for the same period decreased to $299.2 million.

In April of last year, the Detroit casinos reported a revenue of $125.1 million, without a single bet being made.

Gov. Gretchen Whitmer’s recent executive order extends the closures until at least May 28, signaling the anticipation of challenging times ahead.

Michigan’s 23 tribal casinos have been closed since late March and remain so.

State, Detroit suffering from closures

In the first four months of this year, the state collected $24.2 million in taxes from the trio, which is $15.6 million less compared to the $39.8 million collected last year.

In regards to Detroit, the city collected a total of $35.6 million this year from taxes and development agreement payments. This amount reflects a decrease of $23 million compared to the previous year’s collection of $58.6 million.

Mayor Mike Duggan stated that Detroit casinos might not resume full operations until a COVID-19 vaccine is found. In the meantime, they will operate at reduced capacities and strictly adhere to safety protocols.

Fantasy sports net state $240k in first quarter

In December, Whitmer signed a legislation that included provisions for daily fantasy sports operators, as part of the broader expansion of gambling laws.

The Fantasy Contest Fund is funded by fantasy contest operators who contribute an 8.4% tax on their monthly adjusted revenues. This tax covers regulatory and enforcement expenses for the MGCB. The remaining funds are allocated to the state school aid fund.

In the first quarter, fantasy sports operators reported adjusted revenues of $2.8 million, resulting in the state collecting $240,547 in tax dollars, as provided by the gaming control board.

Following the widespread suspension of global sports in mid-March, the numbers experienced a significant decline. The operators’ revenue plummeted to $431,620 in March, in stark contrast to the $2.4 million earned in the preceding two months. Consequently, the state was left with only $36,256 as its net income for that month.

Your home fantasy sports league is probably OK

In addition to mandating tax payments by fantasy sports operators, the control board also provides an exemption for fantasy sports contests held at home.

If you are operating from your private residence, you have the privilege to host one or more fantasy contests without being subject to regulation by the MGCB.

• The contests are restricted from being accessed by the general public.
• The maximum number of fantasy contest players allowed in each contest is 15.
• The total amount of entry fees that the individual can collect for all fantasy contests offered in a calendar year does not exceed $10,000.
• Fantasy contest players receive a minimum of 95% of the entry fees as awards.

More pain ahead with continued closures

The continued closure of Detroit casinos will result in further revenue loss for Michigan.

During May 2019, the Detroit casinos generated a total revenue of $125.7 million, resulting in $10.2 million in state taxes and $15.0 million paid to the city of Detroit.

Can you please rephrase your question?