10.17.07
Associated Press at Forbes.com
MotorCity Casino in Detroit Shuts Down
By COREY WILLIAMS
DETROIT - Lawyers for Detroit's three casinos convinced a judge last month to stop the state from temporarily closing the gambling halls in the event of a partial government shutdown.
Faced Wednesday with a possible work stoppage by more than 1,000 unionized employees, one of the three decided to close itself.
Security guards at MotorCity Casino, just north of downtown, asked gamblers already inside to leave and turned away dozens of others at the doors prior to a noon contract extension deadline.
Union workers were asked to leave or were denied entry into the casino, said Teamsters spokesman Leon Cooper.
Job security, benefits, health insurance and wage increases are the main issues in the contract negotiations between the Detroit casinos and their unions, which include the Teamsters, the United Auto Workers and others. Of immediate concern to the city and state is the loss of nearly $170,000 daily in wagering taxes from MotorCity alone.
MotorCity, Greektown and MGM Grand reported combined revenue of $1.3 billion last year. The state received nearly $158 million in taxes on that money. Detroit received more than $155 million.
Detroit chief financial officer Roger Short said in a statement that the city receives about $450,000 daily in tax revenue from all three casinos.
City and state officials are optimistic that any strike or work stoppage would be short.
"It's between the casinos and unions," said Damian Kassab, chairman of the Michigan Gaming Control Board, which regulates the Detroit casinos. "It's not a good thing and very similar to what we were facing with the state budget crisis. This could be a substantial loss of revenue."
Gov. Jennifer Granholm had threatened to shut down state government if legislators failed to agree on a new budget. The Gaming Control Board at the time argued that state regulators would be laid off, causing auditing and safety concerns in the casinos.
That was resolved when a last-minute budget was reached Oct. 1.
In trying to reach a deal with its unionized workers, MotorCity and labor negotiators agreed Tuesday night to a 12-hour contract extension to 11:59 a.m. Wednesday. The unions already had extended the MGM Grand and Greektown casinos' contracts on a day-to-day basis.
Nothing in the state gaming act prohibits Detroit's casinos from operating during a strike or other work stoppage. Properly licensed supervisory personnel could run the floors, Kassab said.
"The one issue we would have from a regulatory perspective is separation of duties," he said. "We would be concerned that the people normally overseeing the operations may be potentially performing too many of those operations."
MotorCity spokeswoman Jennifer Kulczycki said the casino had no comment on the shutdown.
But it comes at an awkward time for the gambling establishment. MotorCity is expected to open its $275 million, 17-story luxury hotel next month. The casino opened an expanded gambling floor earlier this year.
MGM Grand Detroit opened its hotel and casino complex Oct. 2. Greektown has plans to do same next year.
MotorCity and MGM Grand opened temporary facilities in 1999 after Michigan voters approved casino gambling in Detroit. Greektown opened a year later.
In 2005, Marian Ilitch, wife of Detroit Red Wings' and Tigers' owner Mike Ilitch, bought out her partners and became sole owner of MotorCity Casino.
Forbes.com
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