Detroit casinos fail to produce expected tax revenue

Tuesday, Feb. 15, 2000 | 9:20 a.m.

The city had planned to use the $51.5 million in such tax revenue budgeted for the fiscal year ending June 30 for neighborhood improvements, after-school recreation and other services, The Detroit News reported Tuesday.

The shortfall comes largely because the planned Greektown Casino has yet to open and won't until Michigan Gaming Control Board investigators decide whether to license its investors, the News said.

Given the tax revenue falling short of expectations, "we might have to cut services, freeze hiring or hold back on equipment purchases," city fiscal analyst Irvin Corley said Monday.

The earliest the Greektown group's casino could open is in April. But four investors in that venture reportedly have been negotiating to sell their 40-percent stake, which could further delay the opening.

Even so, the MGM Grand Detroit and MotorCity casinos continue to exceed expectations, reporting combined revenues within $33 million of the $605 million experts projected for all three casinos in their first year.

In recent weeks, the casinos appear to have fallen off their record pace - dropping below the $1 million a day that MGM Grand had reported for its first five months.

Combined, the two casinos generate an average of $1.6 million a day in net revenues, translating to about $140,000 in city taxes on each week day, about $200,000 on weekend days, Corley said.

The MGM Grand opened last summer, the MotorCity site in December.