Detroit Mayor mike dugan credit Michiganthe legal online gambling industry by helping fill the city’s coffers. Without the new market, the state could have suffered greater tax revenue losses last year than it did due to the pandemic.
After March 2020, Detroit auto plants and three retail casinos joined other businesses in adhering to a state-mandated shutdown due to the spread of the coronavirus. During the next 18 monthsthe pandemic has cost motor city on $348 million in turnover, according to Associated Press.
Monday, the Detroit Free Press reported that Detroit received $26.6 million in iGaming and online sports betting tax revenue in fiscal year 2021. With the $71.1 million in tax revenue from online games that will join its $1 billion general fund in fiscal year 2022, Detroit’s budget can return to “normal,” Duggan told the city council.
“Revenues from internet games, which were new to us, have so far offset the losses in our tax revenue.”
How Detroit profited from online gambling
On 158,000 commuters who would normally have had to go to town to work paid income taxes, NextCity.org estimated in 2017. About 59% of them earned more than $40,000 a year. That revenue left Detroit during the shutdowns.
Additionally, pre-pandemic land-based casinos were paying Detroit more than $184 million of the city’s betting tax in 2019, according to the Michigan Gaming Control Board (MGCB).
Then came the fight.
As of 3 p.m. on March 16, 2020, casinos closed from that date until July.
Among the Detroit businesses adhering to the coronavirus closures were the city’s three retail casinos:
- Greektown Casino-Hotel
- MGM Grand Detroit
- Hotel MotorCity-Casino
As a result, in 2020 casinos submitted almost $74 million in the city’s betting tax, according to MGCB figures.
That’s when legal online gambling entered Michigan.
On January 22, 2021, Michigan Online Casinos, Sportsbook and Poker was launched.
That year, MGCB said that operators using the licenses of these three casinos – Bar stool, BetMGM and FanDuel – sent Detroit $55.28 million in online games and $4.07 million in online sports betting taxes and fees.
MGCB $59.35 million the 2021 figure does not match what Duggan discussed, as the state board uses the calendar year. Detroit Duggan’s Numbers Office of the Chief Financial Officer (OCFO) follow the fiscal year.
Meanwhile, MGCB reported that retail casino revenue rebounded and Detroit received nearly $161 million of the city betting tax in 2021.
Play Michigan On Tuesday, detailed tax revenue forecasts even more granular.
Putting the pandemic into perspective
The roller coaster of tax revenue during the pandemic is a story that many cities can tell.
However, it’s not Detroit’s worst economic crisis.
The Michigan city that just emerged from bankruptcy in 2014 is used to finding unusual solutions.
It is the city that Forbes reports reached a deal in which “outside contributors agreed to pour $800 million into Detroit’s underfunded retirement plans in exchange for removing the priceless collection of Van Gogh, Matisse and Picasso from the negotiating table. from the Detroit Institute of Art.
Detroit was considering selling its $4.6 billion art collection to pay his bills.
Balancing the budget with online gambling tax revenue is just the city’s latest work of art.