The Michigan Gaming Control Board reports a 56.1% year-on-year casino revenue drop in 2020 as a consequence of the pandemic.
Michigan Casino Industry Suffers Losses
The Michigan Gaming Control Board (MGCB) has announced a staggering 56.1% year-on-year drop in revenue in Detroit’s three casinos for 2020.
According to the MGCB’s report, Detroit’s casino revenue for the 12 months to December 31, 2020, dropped to $639.0 million – a 56.1% slump year-on-year. For comparison, 12-month revenue in 2019 amounted to $1.45 billion.
The revenue drop is not particularly surprising, given the long shutdown of Detroit’s casino industry, the low figures for September, October when the casinos were allowed to operate, and the restrictions that they had to operate under.
The overwhelming majority of the profits was generated by table games and slots. Combined, they generated $620.4 million in 2020 or 97% of the total. Retail sports betting accounted for only 3% of the yearly revenue and brought in $18.3 million.
The start difference between the two is in part due to the poor timing. Retail sports betting is a relative newcomer in Michigan, being launched on 11 March last year. The market was forced to close only a few days after launching due to the lockdown.
MGM Grand Detroit, MotorCity Casino and Greektown Casino were shut down twice last year. The first instance was by far the worse of the two as it lasted almost five months – from 16 March to 4 August. After a short operational period with limited capacity, casinos shut down again from 18 November to 22 December.
Numbers in Detail
The three Michigan casinos suffered comparable losses in terms of percentages. MGM saw a 58.8% revenue drop to $257.1 million in 2020. This is the largest percentage drop of the three and is followed very closely by Greektown with 58.3% losses to $140.6 million. Motorcity was down 54.9% to $222.7 million.
The casinos paid substantially lower wagering taxes to the state of Michigan as well. In total, they paid $50.3 million in taxes to the state, significantly lower compared to 2019’s $117.8 million. The three also paid a combined $78.3 million in taxes to the City of Detroit.
In terms of sports betting, MGM Grand’s BetMGM sportsbook was 2020’s state market leader. It generated $8.2 million of the 18.3 million, or 44.8% of the total market revenue.
MotorCity, in a partnership with gambling leader FanDuel, comes in at second place with $6.0 million, or 32.8% of the total. And the remaining $4.1 million was generated by Penn National’s Greektown.
Things are looking up, however. Yesterday, 12 January, MGCB Executive Director Richard Kalm said that online offerings will likely launch on 19 January. All operators will be allowed to test the waters with a trial launch during which they can accept bets.