MGM Grand Detroit Provides Octane as Motor City Casinos Notch Record $1.454 Billion Revenue in 2019

Posted on: January 22, 2020, 10:20h. 

Last updated on: January 22, 2020, 11:11h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Lead by the MGM Grand Detroit, the three gaming properties in Michigan’s largest city posted a record $1.454 billion in revenue last year. That’s an increase of $10 million from the $1.444 billion generated in 2018.

With MGM Grand Detroit leading the way, the Motor City’s casinos enjoyed record revenue in 2019. (Image: Cvent)

MGM Grand Detroit and MotorCity Casino each notched ,all-time highs in annual turnover last year. Grand Detroit is operated by MGM Resorts International, while the MotorCity Casino is owned by Marian Illitch, who, along with her late husband Mike Illitch, co-founded Little Caesars Pizza.

Both MGM Grand Detroit and MotorCity Casino experienced their highest yearly adjusted gross revenue totals since the casinos opened in 1999,” according to a statement by the Michigan Gaming Control Board (MGCB) obtained by Casino.org. “MGM Grand Detroit reported $623.5 million in yearly revenue, compared with $619.2 million in 2018, which was its previous record revenue year. It was a 0.7 percent year-over-year increase.”

The Greektown Casino, Detroit’s third gaming property, generated 2019 revenue of $337.2 million, a 0.6 percent increase from the prior year. Penn National Gaming and Vici Properties acquired that venue for $1 billion last May from Jack Entertainment.

MGM Dominates

Last year, MGM Grand Detroit commanded 43 percent of share in that market, with MotorCity Casino and the Greektown checking in at 34 percent and 23 percent, respectively. While MotorCity was in second place, the property still experienced year-over-year revenue growth on its way to record turnover.

“MotorCity’s $493.6 million in yearly revenue also surpassed its former record of $489.7 million set in 2018. It was a 0.8 percent year-over-year increase,” said the MGCB.

Greektown’s $337.2 million in 2019 revenue, though an increase from the previous year, fell short of the all-time high of $352.8 million set in 2011.

In eight months last year, MGM Grand generated more than $50 million in monthly revenue, and in four of the last six months of 2019, the property’s turnover exceeded $51 million. At $46.49 million, September was the worst month of 2019 for MGM’s Michigan venue, while March, at $59.24 million, was the leading month.

On the back of those strong 2019 numbers, Detroit’s casinos sent slightly more cash to state coffers last year than in 2018.

“The three casinos paid the State of Michigan $117.8 million in gaming taxes in 2019 compared with $117 million in 2018,” according to the MGCB. “The casinos paid $10.4 million in gaming taxes to the state in December compared with $10.3 million during December 2018.”

Maybe Another Good Year

The MGCB didn’t make revenue projections for 2020 for the three Detroit casinos or Michigan’s 23 tribal gaming properties. But if the state can get sports betting operational at some point this year, revenue numbers could increase.

Michigan approved sports betting in December, and online and mobile wagering are part of that package.

Industry observers are divided on exactly when sports betting will be ready for public consumption in the state, with ambitious time lines pointing to the spring, but after March Madness. Less optimistic estimates indicate it could take all of this year for Michigan to ready sports betting.

The state is expected to realize $19 million in annual revenue from sports wagering.