Michigan Casinos Generate Taxes for the State and Local Government and Employment for Residents

By Omar Moufakkir

The passage of Proposal E on November 18, 1996, allowed the City of Detroit to develop up to three land-based casinos. The MGM Grand casino opened in July 1999; the Motor City Casino opened in December 1999; and the Greektown Casino opened in November 2000. One reason for Detroit to embrace casino gaming development was to generate tax and employment for residents. The three Detroit casinos generated in total about $726 million, in 2000, and over $1 billion, in gross gaming revenue, in 2001. Each casino must pay a wagering tax on adjusted gross receipts at a rate of 18 percent. The casinos are required to remit the wagering tax each day. The 18 percent wagering tax is divided between the State of Michigan (8.1%) and the City of Detroit (9.9%). Figures published by the Michigan Gaming and Control Board, reproduced in the table below, indicate that in 2001 the casinos paid over $181 million in city and state wagering taxes or about $99 million to the city and about $82 million to the state. In 2000, the city collected about $72 million and the state over $60 million in taxes from the casinos. The three Detroit casinos employ over 7,500 people.

Detroit Casino Revenues and Wagering Taxes, 1999, 2000, 2001.

Casino	Total Adjusted Gross Gaming Revenue	City Wagering Tax (9.9%)	State Wagering Tax (8.1%)
Calendar Year 2001
MGM Grand Detroit	$   366,135,860	$  36,247,450	$  29,657,005
Motor City Casino	$   361,034,768	$  35,742,442	$  29,243,816
Greektown Casino	$   279,822,838	$  27,792,461	$  22,665,650
Total	$1,006,993,466	$  99,782,353	$  81,566,471
Calendar Year 2000
MGM Grand Detroit	$   397,235,335	$  37,544,298	$  32,176,062
Motor City Casino	$   315,746,976	$  31,258,951	$  25,575,505
Greektown Casino	$     30,650,660	$   3, 034,415	$    2,482,703
Total	$   725,632,971	$  71,837,664	$  60,234,270
July to December 1999
MGM Grand Detroit	$  173,679,112	$  17,194,232	$  14,068,008
Motor City Casino	$    14,759,589	$    1,461,199	$    1,195,530
Greektown Casino	$                    0	$                  0	$                  0
Total	$  188,438,701	$  18,655,431	$  15,263,538

Source: Adapted from Michigan Gaming and Control Board.


In a study conducted by MSU Tourism Resource Center staff for the Detroit CVB, total economic impact  (direct + indirect) of the two Detroit casinos (MGM Grand and Motor City), that were open when the study was launched, was estimated to be over $165 million. Casino visitors spending by type are detailed in table below. These estimates are conservative because they include only spending by visitors who reported that their primary trip purpose to Detroit was to visit the Detroit casino(s). The study area was defined as Macomb, Oakland and Wayne counties. Casino visitors who reside in the study area were not included in the economic impact analyses. Spending data were collected by telephone from a sample of over 850 visitors who were intercepted in the non-gaming areas of the casino buildings.


Economic Impact Per Year By Spending Type, Based On A 1.5 Multiplier.