Detroit casinos' revenue declines

Long-term effect of Hollywood Casino Toledo debated

Two vehicles with Michigan license plates are parked at Hollywood Casino Toledo. A recent plate check showed roughly two-fifths of vehicles were from Michigan.

On a recent weekday, about 40 percent of the license plates in the Hollywood Casino Toledo parking lot featured the characteristic blue banner and Great Lakes panorama that denotes a Michigan vehicle.

Since the casino's late May opening, Michigan residents have come to Toledo to try their hand at the latest in gambling fare.

Michigan Gaming Control Board receipts for June reveal a corresponding, modest revenue decline at Detroit's three casinos compared with a year ago.

"I think our environment is more like a Las Vegas environment," Jason Birney, the vice president of marketing at Hollywood Casino Toledo, said regarding the new casino's attractiveness to out-of-staters. "We have a single floor, a nonsmoking environment, and brand-new machines."

Mr. Birney said about 30 percent of Hollywood's business has come from Michigan.

In June, 2011, the adjusted gross receipts for Detroit's three casinos -- MGM Grand Detroit, Motor City, and Greektown -- totaled $113,307,720.90. Revenue totals for June, 2012, decreased to $111,491,700.09.

Hollywood Toledo pocketed $20.4 million in gross revenue in June alone after payouts.

On an individual basis, each of the three Detroit casinos' profits declined since May of this year, with MGM Grand Detroit showing the largest difference of about $4 million.

Nevertheless, the casino has faith in its continued ability to attract a large customer base.

"MGM Grand Detroit is the market leader in Detroit," said Yvette Monet, a spokesman for MGM Resorts International, the parent company of MGM Grand Detroit. "We certainly expect some guests to visit the new casino, but we're confident in our long-proven ability to provide the ultimate experience to our guests.… We experience competition in every market in which we operate, and Detroit is certainly no exception."

A statement issued by the Michigan Gaming Control Board said that revenues also had declined about 4 percent from April, 2012, to May, 2012. Hollywood Toledo opened May 29.

According to Jake Miklojcik, the president of Michigan Consultants, a firm providing economic and policy analysis, it's too soon to determine the lasting impact Hollywood Casino Toledo will have, because the Detroit casinos' revenue decline mirrors one from April to June in 2011.

"It takes a while to know who are the core customers," Mr. Miklojcik said. "There are a lot of anomalies when you open, and that doesn't really tell you what the long-run impact is.

"There will be an impact, but it's not really shown yet, because the [declining revenue] trends are similar to previous years."

Mr. Birney said the figures show a southward expansion of the gambling market, with Hollywood Toledo able to pick up players who wouldn't make the trip to Detroit.

Lakefront Lines Inc., a bus company operating gambling charters from three Toledo pickup points to Greektown Casino, said it had expected to see an initial decline in business when Hollywood Toledo opened.

Paul Grant, Lakefront's Toledo tour department manager, said his prediction of a 30-percent business decline was close, with an actual decrease of between 25 and 30 percent of its customers after the new casino opened.

"The nature of a gambler dictated that -- a gambler always thinks retirement is at the next quarter in the newest casino," Mr. Grant said. "They're going to try it and try it until they lose."

Yet Mr. Grant expressed confidence that his Detroit casino business will rebound, noting that some casual and social gamblers have returned to travel on company buses to Greektown.

"This is a social thing that these people do," Mr. Grant said. "They get on the bus, get out of Toledo. … They know each other by face -- they show pictures of the grandkids, there's a social aspect. They're not getting that by driving their cars out to Rossford."

Meanwhile, Theresa McNamara, a charter-sales supervisor at Indian Trails -- which runs buses from Detroit suburbs to Greektown -- said her company has not noticed a change in business since the Toledo casino opened.

Motor City Casino representatives could not be reached for comment, and Greektown declined to comment for this report.

Contact Madeline Buxton at: mbuxton@theblade.com or 419-724-6368.