In the tangled, complicated world of Detroit’s ailing finances, there is one bright spot that continues to provide a glimmer of hope: the casinos.
Indeed, the casinos — the gleaming MGM Grand, Motor City and Greektown — stand over the city’s downtown as oases of relative financial prosperity in a downtrodden city. And they continue to pump money into a town whose finances are now in the hands of a bankruptcy judge and excruciating courtroom maneuvering.
A recent report by the Detroit City Council indicated that the city collected $174 million in gaming tax revenue in the 2012-2013 fiscal year. And although that represented a slight decline from the previous fiscal year, it was nonetheless $3.5 million than the city had anticipated from casino revenue.
There are three major casinos in Detroit and their combined sales were $1.37 million in the 2012-2013 fiscal year, according to the report prepared by the City Council’s Research and Analysis Division.
In fact, lawyers for the city have often cited in bankruptcy court proceedings their view that gaming taxes account for Detroit’s most stable stream of revenue.
During the course of the city’s bankruptcy proceedings, debt service payments have been stopped. The city’s emergency manager, Kevyn Orr, has indicated he plans to steer the casino revenues toward city services in a $1.25 billion plan to invest in infrastructure and public safety over the next decade.
While the casinos have done well and are continuing to provide thousands of jobs in an economically depressed city, some political figures in Detroit say it will take more than successful casinos to help the city recover beyond bankruptcy.
“There is no question that they are an important employment source and an important tax base for us,” said Mike Duggan, a candidate for mayor of Detroit, speaking in an interview with BET.com.
“But the recovery ... will come as a result of people starting new businesses here,” Duggan said.
“And the city can encourage them by making storefront properties available, by cutting the permit process time and by helping people to fund venture capital. Of course, we’re glad about the contribution casinos make to the city.”
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(Photo: Jeff J Mitchell/Getty Images)