Detroit is broke. Where is all that casino money?

[R8RBOB]

Anyone remember the 90's? Detroiters were taking the bridge and tunnel to Windsor to gamble and some folks were calling for legalizing casino gambling in Detroit. After Engler said no, Detroiters got mad and pushed for Proposal E because those dollars going to Canada could stay in Detroit. [[anyone remember that Gil Hill commercial showing "Detroiters" going through the tunnel pushing for a "yes" vote on Prop E?)

We heard quotes like this:

Supporters, including Detroit Mayor Dennis Archer, say Detroit casinos would create thousands of jobs and pump $1.2 million daily into the city economy. --11.7.96

and this

Supporters say that casinos would help Detroit's economy and that the benefits of casinos outweigh the negatives. The proposal calls for an 18% tax on casino revenue, with 45% going to public schools statewide and 55% to fund anti-crime and other programs in Detroit --Ludington Daily News 10.31.96

and the proposal passed and Detroit got its casinos.

Fifteen years later, Detroit is broke and we have to wonder if it was all worth it? Did the the daily deposit of $1.2 million ever flowed in the city economy? Did Detroiters get the thousands of jobs that the mayor claimed? Did public schools benefit from the 45% that the state would give from its 18% of casino revenues? Did Detroit benefit from the 55% from the state. One has to wonder....

[DetroitPlanner]

Casinos put an extra burden on the police force, this is a cost.

In terms of what happened lets see:

As part of the deal to get the casinos, City income tax was reduced. Originally it was to drop from 3 to 2 percent for residents. Kilpatrick and Granholm agreed that it would be best to stop this at 2.5 percent. Many of the hold-outs said enough of these empty promises and left.

300,000 people left, taking thier city income tax with them.

When 1/3 your population leaves, it leaves a glut of housing. This means taxable value goes down so property tax revenues go down.

As the city shrinks the cost per person to take care of infrastructure, rip down burned up homes, provide firefighters goes up.

In short the city has lost far more revenues from other sources than it recieves from the casinos. Factor in inflation over 10 years, the cost of maintaining aging infastructure, the need to tear down more burned out dangerous houses, provide more police services as looters run rampant and you have quite a pickle.

[R8RBOB]

To be fair, in reference to the thousands of jobs that Archer claimed, a number of Detroiters were ineligible to work in the casinos because they weren't able to pass the background check given by the state. Because of things like criminal records and drug use they are "X" out. Funny how the very thing you root for have no place for you.

Still for those Detroiters who did get to work in the casinos, some found their way to the unemployment line when places like Motor City got rid of people like the girls who used to give you change for the slots.

[Gistok]

Still for those Detroiters who did get to work in the casinos, some found their way to the unemployment line when places like Motor City got rid of people like the girls who used to give you change for the slots.

To be fair... wasn't it always easier to just stick a $5, $10 or $20 into the slot on the side of the machine?? I can't image there were ever too many of those girls there....And as to the criteria for jobs at the casinos... not a city responsibility... thanks to the state Gaming Commission.... who set the bar high to keep out the riff-raff....

[swingline]

Without casino revenues, Detroit would have been under emergency manager oversight 6-7 years ago.

The state backed off of revenue sharing "guarantees" that were part of the originally forecasted budget planning when permanent casinos were approved.

For some reason, none of the casino tax revenue forecasts planned for the little recession that caused a few problems around here either.

Not all the results and consequences of the casinos have been good, but there's been more good than bad.

[R8RBOB]

Without casino revenues, Detroit would have been under emergency manager oversight 6-7 years ago.

The state backed off of revenue sharing "guarantees" that were part of the originally forecasted budget planning when permanent casinos were approved.

For some reason, none of the casino tax revenue forecasts planned for the little recession that caused a few problems around here either.

Not all the results and consequences of the casinos have been good, but there's been more good than bad.

Now this is good. Without the casinos, Detroit would have drown in red ink so they had to be the band-aid for the "D". I don't dispute that but imagine from 1999 [[when MGM opened) until 2008 [[financial collapse) Detroit had maintained its population. In fact, the number of people increased and there were business grown in the city. As a result, the city could use some of that casino money for a rainy-day fund. Detroit could be better than it is right now. IMO

[detroitsgwenivere]

1. Submitting Report on Gaming Tax Revenue activitythrough August, 2011 and prior fiscal years. [[The city collected $17.7 million in gaming tax revenue for the secondmonth of the new fiscal year, which was 23% grater than the prior year August2010. Chart 2 “Monthly Detroit Gaming Tax Collections” through atwelve-month average trend line shows positive growth, approximately 4.3% sincelast August, among the combined casino receipts, etc. Based on the existingdata, we are currently projecting a deficit of $19.47 million for the fiscalyear.) [[AWAITING RESPONSE TO THEMEMORANDUM OF B.F.A. CHAIR COCKREL, BROUGHT BACK AS DIRECTED BY THE BUDGET,FINANCE AND AUDIT STANDINGCOMMITTEE ON 09-27-11)

I pulled this from a Detroit City Council agenda just for you guys

[Meddle]

Where is all that casino money?

Vegas. Don't buy into the lies about it staying local.

[lilpup]

Where is all that casino money?

Vegas. Don't buy into the lies about it staying local.

Nobody expected the profits to stay local beyond the hotels the casinos were committed to build. The money questioned here is the city's cut the casinos are required to pay.

[Gistok]

Now this is good. Without the casinos, Detroit would have drown in red ink so they had to be the band-aid for the "D". I don't dispute that but imagine from 1999 [[when MGM opened) until 2008 [[financial collapse) Detroit had maintained its population. In fact, the number of people increased and there were business grown in the city. As a result, the city could use some of that casino money for a rainy-day fund. Detroit could be better than it is right now. IMO

Ummmm.... when did Detroit stop bleeding residents or businesses? Certainly not between 1999-2008.... downtown may have seen some upticks... but not the majority of the city.Meddle... stop spreading disinformation... MGM yeah the money went to Vegas.... Greektown... maybe it went to St. Sault Marie to the Indian Tribe [[although more than likely it went to banks and creditors)... and MotorCity... it too went to banks [[to pay off Marion Ilitch's loan to buy the rest of the casino)... and any leftovers went to Bingham Farms [[her residence).

[R8RBOB]

Ummmm.... when did Detroit stop bleeding residents or businesses? Certainly not between 1999-2008.... downtown may have seen some upticks... but not the majority of the city.Meddle... stop spreading disinformation... MGM yeah the money went to Vegas.... Greektown... maybe it went to St. Sault Marie to the Indian Tribe [[although more than likely it went to banks and creditors)... and MotorCity... it too went to banks [[to pay off Marion Ilitch's loan to buy the rest of the casino)... and any leftovers went to Bingham Farms [[her residence).

Not really sure how to respond to this. I need a little help.

[401don]

Everyone seems pleased when people from outside the city come downtown to spend money on hotels, theaters, restaurants etc. It seems the casinos generate far more tax revenues than most other venues. Granted, some of that discretionary income might have been spent in the city but not most of it.

[Goose]

Where is all that casino money?

Vegas. Don't buy into the lies about it staying local.

Macau, China?

[R8RBOB]

Everyone seems pleased when people from outside the city come downtown to spend money on hotels, theaters, restaurants etc. It seems the casinos generate far more tax revenues than most other venues. Granted, some of that discretionary income might have been spent in the city but not most of it.

Good posts being posted. Something that people need to remember. Back in the 90's, Detroit was of course having its money issues like now and then Casino Windsor opened in 1993. There was always someone wanting to get casinos in Detroit but Detroiters would always vote them down. [[Anyone remember when Papas and Gatzaros got Babbitt to declare a part of the International Center Building as "Indian land")

After the opening of Casino Windsor, it was a must that Detroit had to have a casino but someone believed if Detroit had more than one casino then the city coffers would be overflowing with cash. Hence the sell job to get casinos by claiming that we need to keep the money in Detroit.

[MikeyinBrooklyn]

I am neither a casino lover or hater. They didn't cause Detroit's problems, and were never going to be a major factor in fixing them. With the exception of the closure of riverfront area businesses when the casinos were going to be built on a "campus" there [[a city proposal), I think they've been more beneficial than harmful.


They do employ thousands of people; while they may not employ as many city residents as they promised, they do employee a much higher percentage than say, GM or Quicken Loans or Blue Cross. They also do pay a fixed tax on wagers at the casinos; their employees do pay city income tax; the hotel guests pay both sales tax and room occupancy tax. That is all money the city did not have beforehand. I do not have the numbers, but I suspect that those revenues vastly exceed the additional costs brought on by their operation.

The city's shortage of funds has 2 big reasons:

First: vastly overspending for decades, including issuance of unsustainable levels of debt. This year the city is spending more than $74M to pay off the minimum amount of debt they can legally. The $500M bond issue for new schools a few years back was the worst possible trick on Detroit kids. Better buildings, while nice, will crowd out police, street lights, and clean parks for the next several decades. Hope you like your shiney school, kids! Decaying buildings, while not ideal, were never even slightly a reason for high dropout and illiteracy rates. The better buildings might make kids feel good; they will not make them think good.

The second reason: except for downtown and midtown, everyone with money is emptying out of the city. Those residents are enjoying not paying local income tax in Canton and Southfield and Troy and... All that human flight has caused property values to plummet. The low values and high default rate has led property tax revenues to plummet. The current revenue collection- or lack of revenue collection- is the result of years of anti-business planning [[sometimes on purpose, but frequently out of ignorance) by the city's politicians.

There is no revenue way out of this dilemma. No substantial city tax could be levied that wouldn't be more destructive than helpful. Even a slight income tax increase would undo every last bit of the efforts the big companies and WSU have tried, with some success, to lure people downtown/ midtown. A sales tax increase would end any progress in bringing retail downtown. Residential property taxes are increasingly uncollectable now. You can't squeeze blood out of a stone. Detroit just needs to slash spending and payroll, regardless of how much it hurts. In the long run, economic growth is the only path to more revenue. It will take a while, though. Detroit will be paying off the damn city debt for the NEXT THIRTY YEARS because of the irresponsible fools that were elected in the LAST THIRTY YEARS. I think a song says, "it's a long, long road."

[Dexlin]

"Where is all that casino money?" I get tired of hearing that old, silly chestnut. It's in the buget; that's where it is. What you should be asking is where the property and income tax money is, which is also a stupid questions, because it's lost with the plummeting property values and with the 2,000-a-month outmigration of the population.

No city's tax base the size of Detroit can survive losing nearly 2,000 every month for a straight decade. It's nearly completely impossible to plan a city around losing that many people on top of not knowing exactly from which neighborhoods the loss is coming from since it's pretty much all of them. Detroit is overspending...just like every other city. The difference is that they could stop all services tomorrow, and they still wouldn't be in shape to do anything with the crushing level of population loss the city sustains.

[Occurrence]

Casinos are proof the human race is stupid.

It's common knowledge the house always wins in the end, yet the casinos are packed. What is fun about feeding these places money and buying overpriced drinks? Just walk through any one of our casinos and you will see depressed pathetic fat drunken slobs pumping money into the slots all day and all night. It really is sad.

[Gistok]

Casinos are proof the human race is stupid.

It's common knowledge the house always wins in the end, yet the casinos are packed. What is fun about feeding these places money and buying overpriced drinks? Just walk through any one of our casinos and you will see depressed pathetic fat drunken slobs pumping money into the slots all day and all night. It really is sad.

Talk about blatant sterotyping.... can your comments get any more ridiculous??

People of all walks of life visit Casinos.... retires who come in by the busloads on any given day from Ohio and Indiana and other points within Michigan... suburbanites, out-of-towners, whites, Chaldeans, Arab-American, Mexican-American, African-American, lower & middle class city residents and suburbanites, millionaires,sports and movie stars, politicians and business owners... young, middle age and old... blue and white collar, skinny, middle weight, morbidly obese... you name it, the list is endless... all walks of life...

To somehow be able to recognize or pigeonhole folks who go to casinos as overweight drunken slobs is just plain ignorant...

[DetroitPlanner]

The drinks are dirt cheap at casinos. I can drink all the Pepsi or Coffee I want for free!

[Wesley Mouch]

"Where is all that casino money?" I get tired of hearing that old, silly chestnut. It's in the buget; that's where it is. ...

That's right. Just like the lottery money to 'improve' schools. Just part of the budget.

What you should be asking yourself is has any political promise of riches ever turned true?

Stop electing on the basis of promises of 'quick fixes' and elect good managers of resources. Snyder may be conservative, but he's more likely to conserve your money than anyone else. And that'll help the poor much more than 5,000 programs to distribute money -- which you can watch be pillaged daily.

[R8RBOB]

What you should be asking yourself is has any political promise of riches ever turned true?

I believe you got the spirit of what I was getting to which was politicians promising "pie in the sky" and then come back to the people crying broke.

My question of "where is all that casino money?" was not meant to really be answered because the casino money was "pie in the sky" that was sold to the people back in the 90's to get casinos into the city. We knew the casinos would provide jobs. We knew the casinos would build hotels. We knew the casinos would pay a tax. We knew all this things which is why they was voted down time and time again because Detroiters did not want casinos in Detroit despite the jobs, the tax, the hotels, etc... The reason why Detroiters agreed to have casinos in the city [[this includes the churches) is because the city leaders like Archer was telling the citizens that casinos in Detroit would generate much needed money to improve services, lower taxes, make life in Detroit better. Detroiters were more than happy to travel to Windsor or Saint Ste. Marie but we told that that money could make Detroit better.

[Occurrence]

Talk about blatant sterotyping.... can your comments get any more ridiculous??

People of all walks of life visit Casinos.... retires who come in by the busloads on any given day from Ohio and Indiana and other points within Michigan... suburbanites, out-of-towners, whites, Chaldeans, Arab-American, Mexican-American, African-American, lower & middle class city residents and suburbanites, millionaires,sports and movie stars, politicians and business owners... young, middle age and old... blue and white collar, skinny, middle weight, morbidly obese... you name it, the list is endless... all walks of life...

To somehow be able to recognize or pigeonhole folks who go to casinos as overweight drunken slobs is just plain ignorant...

Well of course I didn't mean EVERYONE who visits a casino is that way, but there is a large amount of people that are.

Maybe it's just because I'm a people watcher, but every time I have been dragged to the casino with others, I just sit and watch people. There are some depressing looking folks in there slipping money into those slots. I hope they find what they are looking for.

[Islandman]

Oh, you've got it right, I completely agree. It's depressing to see, especially when most shouldn't be there, financially or emotionally. But hey, it's a free country. You won't be catching me spending my hard earned money at these places. Especially when there's a strip bar right down the street. Just kidding.

[Occurrence]

Well I wouldn't really say it's a free country. Apparently it's morally acceptable to get liquored up and blow your kids college money in a casino, but people still give me crap because I'm a medical marijuana patient.

[Danny]

Where the caSINo money! Gone to greed corporations who robbed from the poor! Good thing that I have voted NO on the three casinos. What a doomed city we living in.