The closure of 26 casinos in Michigan has cost state and local governments nearly $100m over a three month period in lost tax revenues during the COVID-19 lockdown, according to new analysis by PlayMichigan.
PlayMichigan.com’s Matt Schoch, highlighted that casinos in Michigan have been closed from March 15 through to June 15. The closures resulted in a loss of $44.6m in tax revenue for the city of Detroit, $44.2m in tax revenue for the state of Michigan and $7.5m in revenue for various local governments, a result of the two per cent revenue sharing payments from tribal casinos.
Combined, the lost revenue for state and local governments totalled to $96.3m with the figures set to increase.
“The closing of the state’s casinos has left a revenue hole in the Michigan budget that will be very difficult to fill,” said Dustin Gouker, lead analyst for PlayMichigan.com. “It shows just how difficult the road that lies ahead is as the state begins to recover from the COVID-19 pandemic.
“The response to the pandemic was swift and understandable, but the toll has been significant in terms of tax revenue, and that is just one facet. Operator revenue has completely dried up, and that will have long-term ramifications, too, including job losses.”
Many tribal casinos have already reopened with reduced capacity alongside other limitations. Detroit casinos are hoping to reopen before July 4 according to Gov. Gretchan Whimer, with restrictions such as a 15 per cent capacity and a smoking ban on the casino floor.
Gouker concluded: “With the sports world figuring out a safe way to reopen, sportsbooks will be a key to Michigan’s recovery efforts,
“After three long months, a return to something resembling normal is welcome for everyone, including state and local governments and the operators themselves. If Michigan can avoid major setbacks, casino revenue will only help as the whole state recovers.”