Concerns over revenue losses as Detroit casinos reopen

Detroit casinos are set to re-open tomorrow (Wednesday) but predictions of continued revenue losses threaten the industry and the city.

US.- As Detroit’s three commercial casinos prepare to reopen tomorrow (Wednesday), operators and the city are counting the cost of the pandemic.

The city of Detroit is highly dependant on tax receipts from its three commercial casinos, all of which have been closed since March due to the pandemic.

Casino wagering taxes are estimated to account for around 16 per cent of Detroit’s total revenue. In 2019, casinos provided nearly $118 million in wagering taxes.

While re-opening has been welcomed to start bringing in wagering taxes again, strict capacity requirements mean revenue is unlikely to reach pre-pandemic levels for some time.

Detroit casinos reopening this week must reduce their capacity to 15 per cent to ensure social distancing. That’s a figure substantially lower than that of Las Vegas Casinos which are permitted to open with 50 per cent capacity.

Other requirements include blocking the use of slot machines, closing food buffets and installing plexiglass barriers at table games.

According to the specialist financial consultant Alex Calderone: “unless everyone who comes in the door plays and loses five or six more times than they normally would, it’s nearly impossible to generate similar revenues.”

The timing of the casinos’ reopening has also caused confusion, coming after Govener Gretchen Whitmer last week announced a ban on indoor bars,

But speaking on the re-opening of casinos, Gov. Whitmer said: “Casinos have been operating safely across most of the country and in tribal areas in Michigan and should be able to do so in the Detroit region as well.”