Despite being in one of the two hardest-hit regions of America, Detroit has posted casino-revenue gains in five of the last seven months. It’s done this without significant new casino product (unlike Missouri, which is -4% once River City is subtracted) and without new games (unlike Pennsylvania). Given not only the Great Recession but the high unemployment in Michigan, Motown’s three casinos are obviously doing something right.
Well … except maybe Greektown (above), where revenue continues to slip ($30.5 million or -3.5%) as the owners struggle to find new management after a group of former Station Casinos executives (aka Warner Gaming) left G’town in the lurch. Pink-slipping Fine Point Group, which had overseen an impressive turnaround, is really coming back to haunt post-bankruptcy Greektown. MGM Grand Detroit (+5.5%, $50 million*) continues to be the big dog, exceeding analyst projections, while MotorCity is in distant second place at $38 million (but also 5.5% up from last year). When one looks at how anemic the Illinois market has become, the continued reliability of Detroit is one of the best stories in gaming today.
* — Cash flow at MGM Grand Macau was a comparatively puny $19 million for the entire second quarter. It’s not an apples-to-apples comparison but it makes Detroit’s performance no less impressive.
Signs of life are springing up in the vicinity of LVA HQ, the first in several years. A couple of egregiously empty lots have been fenced in and converted to storage space. Heck, even a “roach coach” set up shot across from the Huntington Press building this morning. Going back two years or more, these are the first “green shoots” we’ve seen … unless you count the bramble bushes that dot the sidewalks.
I returned last week from my annual visit to Detroit. While there, I checked out the three Detroit casinos, MGM Grand Detroit, MotorCity and Greektown. My first impression of the tri-county Metropolitan Detroit area was that although the city of Detroit is bleak, the suburban areas are doing better than I expected. Restaurants and shops in Birmingham and Northville, the two towns in which I spent most of my time, were very busy. I was pleasantly surprised.
The state of Michigan and Detroit were wise to limit the number of commercial casinos to three. Detroit won’t get over-saturated as is the northeast part of the country. Each casino has its unique personality and target market. MGM Grand is clearly the leader and appeals to both Detroiters and suburbanites alike. Its two Michael Mina restaurants (Bourbon Steak and SaltWater) and Wolfgang Puck restaurant are excellent. Each has made adjustments due to the economy by offering small plates and special bar menus, and although pricy, appeared to be doing fairly well. Since downtown Detroit isn’t known for its first class hotels, MGM has the advantage of being first choice for many business travelers and meeting groups because of its 4-Star hotel. This, in turn, helps the restaurants. MGM Grand made the right decision in building a totally new permanent facility which opened three years ago. Thus, it has the best designed casino, hotel and parking of the three casinos.
MotorCity Casino, which is owned by Marian Ilitch, trails MGM Grand and appeals to a more urban clientele. It is well run and has an excellent high-end restaurant, Iridescence, on the top of the hotel tower. Unlike MGM Grand, MotorCity bought the old Wagner Bakery Company buildings and converted them to the casino and then built a parking structure and hotel which are connected to the casino building. However, there are different levels and a floorplan which leaves a lot to be desired, in my opinion.
Greektown is the perennial straggler. Not only is its management constantly in a state of flux, its layout is by far the worst of the three. Part of the casino is located in Trapper’s Alley, a rabbit warren of a 19th Century warehouse originally used by fur traders. This means the casino is on several levels and has low ceilings and a chopped up customer flow. The newer part of the casino, which was constructed by extending the second floor over Lafayette Blvd is actually quite attractive. However, the newly opened hotel tower and parking garage are across the street from the casino and connected by an enclosed overhead walkway. The casino’s location in Detroit’s historic Greektown has done little to improve its business. However, someone I visited with in Detroit last week said she likes Greektown the best of the three casinos because it attracts “real people”, not the “snobs who go to MGM Grand.” As I said, each property has a unique personality.
One reason MGM Grand and MotorCity do so well financially is that they do not comp alcohol. When the casinos were originally approved in the 1990’s, the state liquor law was interpreted as prohibiting comped drinks. Several years ago, the law was deemed to allow comped drinks. MGM Grand and MotorCity have never acknowledged it and refuse to offer drinks. Greektown, in its attempt to survive, now offers drinks to players in its high limit areas.
I took a few photos of Greektown which can be seen at:
http://travel.webshots.com/album/578329467KhaYhF?start=0
Detroit casinos have played a large part in my reduction in Las Vegas visits. MGM and Motor City casinos have really stepped up to the plate as class organizations. The casinos are beautiful, the various types of restaurants are great, the entertainment is very good but the biggest factor is the people.
Everyone you will come in contact with is very pleasant and very helpful. I know these employees are happy to be employed but so should the employees in Vegas, but that is not the case.
I will still visit Vegas but not nearly as often.
Thanks for the photo tour, Detroit. I well remember the politicking that surrounded the bringing of casinos to Motown. Back when Dennis Archer was mayor, the endgame was put all three down on the waterfront. However, once the “temporaries” (all but one of which are still in operation), their occupants balked at moving. Greektown Casino was the most opposed, arguing that the purpose of the casino — revitalizing Greektown itself — would be defeated by relocation. City fathers bowed to the inevitable.