Casino Revenue Lower-Possibly Due to Economic Unrest
The gross gaming revenue of Detroit casinos continues to measure lower than the previous year. Many believe this is due to the economic unsteadiness the United States has experienced these last few months.
All three Detroit casinos (MGM Grand, Motorcity, and Hollywood Casino at Greektown) Gross Gaming Revenue have measured lower than expected since May. September’s winnings from slot and table game totals were $100.8 million-6% less than its September 2021 winnings. Even though revenue decreased over the past five months, the 2022 year-to-date total revenue is still slightly higher than the previous year. At the 9-month mark in 2021, total revenue was $940 million, while 2022 sits at $948 million. Last month’s online casino total handle was up month-over-month but faced a slight decline when compared to last September’s numbers.
Casino Following Economic Struggles
A poll conducted by Cinch Home Services, shared by USA Today, revealed that about 76% of Americans believe that the United States is in a recession. President Biden stated that he did not believe that a recession was “inevitable”. He stated for CNN interviewer Jake Tapper “I don’t think there will be a recession. If it is, it will be a slight recession — that is, we’ll move down slightly.”
While some United States citizens debate on whether or not the country is in a recession, the definition of “recession” states a pretty solid argument.
“A recession is a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in Gross Domestic Product in two successive quarters.” (Oxford Dictionary Definition).
According to the United States Department of Labor, the Consumer Price Index has risen .4% since the last month and 8.2% over the past year. This percentage has exceeded many economists’ estimates for this year. The Consumer Price Index measures the change in the cost of goods and services over time. To put it in perspective, in October 2021, a gallon of gas cost an average of $3.29 in the state of Michigan.
Today, the average price per gallon in Michigan is $4.11. With a very little wage increase, inflation is hitting many Americans hard.
It would make sense for the revenue of these downtown casinos to decrease as Michigan residents are determining how to combat inflation and other economic issues. With rising gas prices, food, services, and housing, many Americans are becoming stricter on spending.
Players Switch to iGaming
Another reason for the decline of revenue at MGM Grand, Hollywood Casino at Greektown, and Motorcity casinos could be many players’ migration to online games.
Since iGaming became legal in Michigan, it has grown to become a significant part of the gambling industry. iGaming allows users to play their favorite slots and table games from the comfort of their own homes. The sites especially flourished during the COVID-19 Pandemic, when many land-based casinos had to close their doors. While their land-based partners’ revenue sank, iGaming’s revenue has risen in the past year. In August 2022, their yearly revenue totaled $130.9 million, 34% higher than in August 2021.
The top Detroit casino’s gross gaming revenue percentages have dropped this year while the United States Consumer Price Index has increased. While it has been said that “correlation does not equal causation,” the connection between the casino industry and the country’s economic unrest is one to take note of.
Mac Daniel is a Michigan native and freelance writer for PlayOnlineCasino and PlayOnlineSportsBetting. He has experience writing about a wide variety of topics, including healthcare, tourism, non-profit organizations, and most recently casino and sportsbetting news. To check out more of his work, visit: playonlinemichigan.com