AGA: Michigan Casinos Create $6.3bn in Annual Economic Impact

  • Casinos in the state employ 37,911 people and contribute $1.3bn in taxes each year
  • The three Detroit casino closures cost the state about $114.1m
  • 2020 first half revenue for the Detroit casinos was down 59.3% year-on-year
MotorCity Casino
In a new report, the American Gaming Association says that Michigan’s casinos have a $6.3bn annual economic impact on the state. [Image: Shutterstock.com]

A new report

The 27 casinos in Michigan generate an annual economic impact of $6.3bn, according to a new report published by the American Gaming Association (AGA). The casinos – three commercial and 24 tribal – employ 37,911 people, with annual wages of $2.1bn. They contribute $1.3bn in local and state taxes. 

shows how critical casino gaming is to Michigan’s economy”

Highlighting the importance of the casino sector in Michigan, the AGA said: “The report shows how critical casino gaming is to Michigan’s economy, and consequently, how important gaming will be to the state’s economic resurgence.”

Sector is suffering

The report was released as Detroit’s three casinos get ready to reopen after being shut down since the middle of March because of the COVID-19 pandemic.

The MGM Grand Detroit, MotorCity Casino, and Greektown Casino can reopen starting Wednesday, August 5 at 15% capacity. Their closures led to the local and state governments losing out on about $114.1m worth of tax revenue. Of this lost sum, $46.7m would have gone to education programs, while $67.8m would go to initiatives in the Detroit area. 

For the first six months of 2020, Michigan Gaming Control Board figures show a 59.3% year-on-year drop in revenue for the three commercial casinos in the state. The AGA report underlined how vital it is that casinos in Michigan can reopen safely, as many people rely on the sector for jobs and the state relies on the tax revenue. 

Tribal casinos did not have an obligation to follow the statewide shutdown orders because they are located on sovereign land. However, most of these casinos shut down when the coronavirus pandemic lockdown was at its height before beginning to reopen at the end of May. These tribal casinos are a key revenue driver for Native American businesses, communities, and families.

Something to look forward to

The state will get a boost to its gambling revenue when online casinos and sportsbooks, legalized at the end of 2019, launch. Experts believe that the Michigan sports betting market could be one of the biggest in the country when it matures.

The plan is to have the online gambling platforms live by the end of 2020 or in early 2021. Retail sportsbooks launched in March, shortly before casinos closed because of the pandemic. There is an 8.4% tax on sportsbook gross gaming revenue, with an additional 1.25% city tax in place for the Detroit casinos.