Detroit Casinos’ Revenue Trends: A Detailed Analysis of 2023 Performance
The Detroit casino industry marked a notable year in 2023, with the three major casinos – MGM, MotorCity, and Hollywood Casino at Greektown – reporting a combined monthly aggregate revenue (AGR) of $116.2 million for December.
This figure, comprising $111.4 million from table games and slots and $4.8 million from retail sports betting, reflects the evolving dynamics in the gambling sector.
A Closer Look at December Earnings
In December 2023, the revenue shares stood at 44% for MGM, 32% for MotorCity, and 24% for Hollywood Casino at Greektown. This period saw a 2.9% increase in table games and slot revenue compared to December 2022, and a significant 46.6% jump from November 2023. However, when evaluating the entire year, there was a slight dip of 2.7% in revenue from table games and slots compared to the previous year.
The individual casino performances in December showed mixed results. MGM experienced a slight decrease of 0.7%, totaling $50.6 million. Conversely, MotorCity and Hollywood Casino at Greektown saw increases of 5.1% and 7.5%, respectively.
Revenue Contributions and Taxes
December 2023 was a lucrative month in terms of tax contributions. The Detroit casinos paid $9.0 million in gaming taxes to the State of Michigan, slightly higher than the $8.8 million paid in December 2022. Additionally, they contributed $13.8 million in wagering taxes and development agreement payments to the City of Detroit.
The fourth quarter of 2023 presented a different picture, with all three casinos experiencing a 12.9% decrease in aggregate revenue compared to the same period in 2022. MGM’s revenue was $118.6 million, MotorCity’s was $84.4 million, and Hollywood Casino at Greektown’s was $66.2 million. This quarterly downturn resulted in the casinos paying $21.8 million in gaming taxes to the state, a decline from the $25.0 million in the same quarter of the previous year.
Retail Sports Betting Performance
Retail sports betting emerged as a significant contributor in December 2023, with a total handle of $30.4 million and gross receipts of $4.8 million. The December qualified adjusted gross receipts (QAGR) for retail sports betting showed a substantial increase of 54.9% compared to November 2023.
The distribution of December QAGR among the casinos was as follows:
- MGM: $291,171
- MotorCity: $2.3 million
- Hollywood Casino at Greektown: $2.2 million
Analyzing the entire year, the total aggregate revenue of $1.237 billion marked a 3.1% decrease from the previous year. This revenue comprised 80% from slots, 19% from table games, and a mere 1% from retail sports betting. MGM maintained the largest market share at 46%, followed by MotorCity at 31% and Hollywood Casino at Greektown at 23%.
Additionally, the fantasy contest sector also reported significant earnings. In November, operators reported $1.8 million in adjusted revenues, contributing $149,915 in taxes. From January to November, the aggregate revenue stood at $21.3 million, with $1.8 million paid in taxes.
Our Comment on the Article
The 2023 performance of Detroit’s casinos offers a fascinating insight into the current state of the gambling industry. While there was a notable yearly decrease in overall revenue, the surge in December’s figures and the burgeoning retail sports betting market indicate a dynamic shift in consumer preferences and gambling trends.
This analysis not only serves as a valuable benchmark for industry stakeholders but also highlights the critical role of gambling revenues in supporting state and local economies. As the industry evolves, understanding these trends will be essential for future strategic planning and regulatory considerations.
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