May 13, 2012 Detroit Free Press story
When casinos open starting this month in four cities in Ohio, Detroit may come up a big loser. The already cash-strapped city could see a decline of up to $30 million a year in its casino tax revenues by 2015 as Ohio's casinos cannibalize the regional gaming market, a new analysis predicts.
Currently, MGM Grand Detroit, MotorCity Casino Hotel and Greektown Casino-Hotel get more than 80% of their revenue from visitors coming from within 150 miles of the city, including northern and central Ohio. Once the Ohio casinos open, particularly the one in Toledo, "Detroit's casinos will no longer be the obvious gaming choice for day-trippers," the McKinsey report said.
Since Detroit gets about 15% of its general fund revenue from casino taxes -- about $177 million of the $1.2-billion general fund budget for the year that ended last June 30 -- a $30-million hit would be a big loss.
Miklojcik said Detroit, by dint of rapidly declining revenues as its population shrank amid a recession and plummeting property tax values, didn't have the luxury of seeing gaming tax revenue as an extra income source.
Instead of enhancing the city budget, casino tax revenue quickly became a pillar of it, going to pay for basic services instead of being earmarked for special projects and services, as it has in other cities with casinos.
Miklojcik said he believes it's better that the casino tax money is run through the general fund, so that it props up basic services, such as public safety.