Detroit Casinos Projected To Lose $67M During Three-Week Shutdown According to MichiganSharp.com
With mobile sports betting yet to launch, Michigan's commercial casinos also losing out on an additional $30M monthly
DETROIT, Nov. 19, 2020 /PRNewswire/ -- Michigan's commercial casinos all must close for three weeks, as the Michigan Department of Health and Human Services issued an emergency order Nov. 15. With COVID-19 cases at an all-time high in the state, the emergency order forces the casinos to close from Nov. 18-Dec. 8.
The state's commercial casinos, all located in Detroit, include the MGM Grand, MotorCity Casino Hotel, and Greektown Casino-Hotel. The three casinos stand to lose $67 million in revenue during the three-week shutdown, based on projections from MichiganSharp.com.
Despite a 15% capacity limitation, Detroit casinos earned $101.4 million in revenue in October. Based on that figure, the three-week shutdown projects to $67 million in lost revenue for Michigan's commercial casinos.
That projection includes $5 million in lost sports betting revenue, based on $7.6 million in October earnings from sportsbooks at the three Detroit casinos.
Potential Impact Of Online Sports Betting And Casino Gaming In Michigan
Michigan regulators were hopeful for a November launch of statewide online sports betting, but recent snags in the regulation process could push the launch back to December, or even early 2021.
Online sports betting and casinos continue to boom in states like New Jersey and Pennsylvania. Both states realized record revenue figures for both mobile sports betting and casinos this summer.
Mobile wagering accounts for more than 80 percent of overall sports betting revenue in both states.
If that 80 percent metric is applied to the three Detroit casinos, Michigan's commercial retail sportsbooks project to miss out on $30 million in monthly revenue during the fall sports season, including $2.5 million in lost tax revenue for Michigan.
"The sports betting boom across the US comes from the popularity of mobile wagering," said Geoff Fisk, analyst for MichiganSharp. "We likely won't see any states where retail sportsbook revenue comes anywhere close to what mobile wagering can produce."
New Jersey went over $200 million in 2020 mobile sports betting revenue in September, while Pennsylvania topped $87 million.
MichiganSharp.com projects that online casinos and sports betting could bring in $650 million in annual revenue for Michigan's commercial and tribal casinos. That projection includes $250 million from online casinos, producing an additional $5 million in monthly tax revenue.
"The pandemic can't shut down online gaming platforms," Fisk said. "Mobile gaming is vital to the survival of the retail casino industry."
For more analysis and news on Michigan's legal gambling industry, visit MichiganSharp.com.
Contact: Amber Hoffman, Managing Editor of MichiganSharp.com: [email protected]
SOURCE MichiganSharp.com
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