Detroit Mayor Mike Duggan Credits iGaming for Keeping City Budget Afloat
Posted on: March 8, 2022, 10:30h.
Last updated on: March 8, 2022, 01:12h.
Detroit Mayor Mike Duggan (D) says the city’s financial outlook would be much different without legal internet gaming and mobile sports betting. But with the expanded gaming options, the city’s budget is forecast to be whole, despite substantial losses caused over the past two years by the COVID-19 pandemic.
Appearing before the Detroit City Council yesterday to present his proposed $1.2 billion “Return to Normal” budget for the 2023 fiscal year, which begins July 1, Duggan credited iGaming for helping fund the upcoming financial outline.
Tax revenue from online slot machines and table games generated $26.6 million for the city during its 2021 fiscal year. But that number is expected to balloon to more than $71 million for the current 2022 fiscal year. Duggan says the surge in iGaming taxes has the city positioned soundly for 2023.
“In December 2019, the casinos went to Lansing and asked for legislation to allow internet gaming. We struck a deal and the city got a share of the internet gaming,” Duggan said before the City Council.
“That internet gaming revenue has so far offset the losses of our income tax revenue,” the mayor explained.
Detroit is home to three brick-and-mortar commercial casinos — MGM Grand, Motorcity, and Greektown. The three properties began their COVID-19 recoveries last year.
MGM, Motorcity, and Greektown collectively won $1.26 billion on their land-based casino floors in 2021. That was more than double the amount they kept from gamblers in 2020 when their properties were closed for much of the year on Governor Gretchen Whitmer’s (D) orders.
Still, 2021’s gross gaming revenue total remained 13% below the record $1.45 billion the three Detroit casinos won in 2019. But iGaming more than offset the difference.
Gross gaming revenue (GGR) from internet gaming and mobile sports betting totaled $1.1 billion in 2021. Online slots and tables accounted for $1 billion, with online oddsmakers responsible for $110.6 million in income.
iGaming taxes totaled $268.3 million. The City of Detroit’s share was $59.35 million.
Duggan is certainly a major advocate of legal iGaming. The mayor, now in his third term, says allowing Detroit’s casinos to operate online casinos and sportsbooks was vital to delivering the city’s critical tax revenue during the most desperate of times.
The mayor added that the new tax revenue source allowed Detroit to remain free of state financial oversight “while making sure residents could still rely on city government during this pandemic.”
With many downtown Detroit businesses closed or having their employees work remotely during the pandemic, Detroit saw its income tax drop more than $170 million. In April of 2020, amid the pandemic’s earliest days, Duggan outlined nearly $350 million in cuts to maintain a balanced budget without laying off any full-time city employees.
Detroit’s income tax, which is levied on anyone earning money in the city, is its largest budget source. Resident individuals are subjected to a 2.45 percent income tax, while non-resident earners are taxed at 1.2 percent.
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