Detroit casinos facing $67m losses as COVID forces further closures

Michigan’s Department of Health and Human Services issued an emergency order this week enforcing the closure of its casinos in the state for three weeks. The decision has been taken as COVID-19 cases reached an all-time high there.

The state’s commercial casinos, all located in Detroit, include the MGM Grand, MotorCity Casino Hotel, and Greektown Casino-Hotel. All three locations stand to lose $67m in revenue during the three-week shutdown, based on projections from affiliate website MichiganSharp.com.

Despite a 15% capacity limitation, Detroit casinos earned $101.4m in revenue in October. Based on that figure, the three-week shutdown projects to $67m in lost revenue for Michigan’s commercial casinos. That projection includes $5m in lost sports betting revenue, based on $7.6m in October earnings from sportsbooks at the venues.

In terms of the potential impact of online sports betting and casino gaming in Michigan, MichiganSharp noted that state 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% metric is applied to the three Detroit casinos, said the affiliate, Michigan’s commercial retail sportsbooks project to miss out on $30m in monthly revenue during the fall sports season, including $2.5m 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.”

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