Nov. Revenues Boost Year-Over-Year Performance of Detroit Casinos

Solid November boosts year-over-year revenues at MGM, MotorCity casinos

12.14.2011

By Jaclyn Trop

Detroit's two largest casinos continued to improve their revenue growth for the year with a solid November, leaving Greektown Casino and Hotel lagging, according to state statistics released Tuesday.

MotorCity Casino Hotel, the city's second-largest casino by market share, posted the largest year-over-year gain. The gaming hall posted revenues of $431.5 million from January through November of this year, a 5.8 percent gain over last year's $407.9 million, the Michigan Gaming Control Board reported.

Market share leader MGM Grand Detroit experienced a 2.8 percent rise in revenues to $547.4 million.

Revenues for Greektown Casino and Hotel, the smallest gaming hall, fell 0.9 percent to $321.7 million. (Complete Story)

Detroit's Casinos Poised to Lose 20-30% of Their Business to new Hollywood Casino Toledo next year

Short-sighted infighting and competitive jealousy among Detroit's three casino operators 

could keep them from working together to collectively market Detroit as a destination 

with sports venues, theaters, concert halls and other attractions.

Penn National Gaming's Hollywood Casino Toledo

Matt Helm of the Detroit Free Press is reporting that Penn National Gaming is set to open Hollywood Casino Toledo in April.  The $300 million gambling palace will have 2,000 slot machines, 60 table games and 20 live poker tables; comparable in size to Detroit's three commercial casinos.  

For more than a decade, Toledo residents who had an urge to gamble got in their cars or on charter buses to make the one-hour drive north on I-75 where they could play at any Detroit's three Las Vegas-style casinos. However, with the opening of the Toledo casino, locals there hope to stem the steady traffic northward and keep that gambling money in Toledo.

Detroit casino operators won't talk in detail about where their customers live, so it's not clear how much of the $1.3 billion in revenues reported at Detroit's three casinos each year since 2006 comes from Ohio residents.

But Jake Miklojcik, a casino analyst and president of Lansing-based Michigan Consultants who is often used as a resource by Detroit's casino operators, said he has heard out-of-state gamblers -- primarily from Ohio and Ontario -- represent as much as 20% to 30% of the clientele who sign up for Detroit casino player loyalty cards.

That Detroit’s self-interested casinos now spend their efforts as Miklojcik explains, "fighting over the same patron, money Detroit is going to get anyway," may create even greater exposure for the Detroit gambling halls. "That fight over that person," Miklojcik explains, " is a zero-sum game for the industry as a whole."

Penn National is the nation's third largest gambling enterprise with vast marketing expertise and experience. Their newest casino will open with amenities including a top-notch steakhouse, live entertainment seven days a week, and plentiful parking -- nearly 2,900 spaces.  Penn National understands the importance of partnering with hotels in downtown Toledo and in nearby suburbs to offer entertainment packages with destinations such as the Huntington Center to lure visitors.  The company plans to market “over the border” in southeast Michigan as well, including billboards along I-75 and U.S.-23.

The Toledo casino will be the first of four casinos to open in Ohio since voters approved one for each of the State’s four biggest cities. Penn National will operate all four venues.  Read more

New Hollywood Casino Toledo just 1-hour for downtown Detroit

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MotorCity Casino Workers Told to Pay Health Care Costs or Face Job Lose; MGM Grand Detroit workers say, 'Hell No!" reject contract | Crain's Detroit Business

MGM Grand Detroit workers reject contract, will stay on the job | Crain's Detroit Business
10.28.2011

Unionized workers at the MGM Grand Detroit casino have voted overwhelmingly to reject a contract.

The rejection comes after workers at Greektown Casino-Hotel and MotorCity Casino Hotel both approved the contract.

Employees voted 1,481 to 292 against the contract, according to the Facebook page of UAW Local 7777, one of five unions that make up the Detroit Casino Council coalition of unions.

Also in the council: Hotel Employees and Restaurant Employees Local 24, Teamsters Local 372, Operating Engineers Local 547 and the Michigan Regional Council of Carpenters.

The unions are reportedly planning to picket in front of the casino this weekend, but employees will be reporting to work.

The action follows a tense stare-down last week that nearly resulted in a strike.

The Detroit Casino Council authorized a strike two weeks ago, then filed two extensions before reaching an agreement in principal last Wednesday.

The deal reportedly includes a $2,500 signing bonus for employees but also a deductable for health insurance coverage.

MotorCity Casino has struggled somewhat financially because, among other things, it hasn't produced what had been anticipated and Mrs. Ilitch has leveraged its assets more highly than had been projected. But even more significant, Marian Ilitch and her unlicensed gambling partner Michael Malik are draining millions from MotorCity Casino out of Detroit to finance their failed quests to open additional gambling halls in New York, California and Hawaii. It's a shame that they're draining profits at the same time they're telling MotorCity Casino workers they'll have to start paying for health care or be faced with job loses. Ilitch and her husband Mike are now worth $2 billion -- that's $300,000 more than a year ago.

See also:

• MotorCity Casino Workers Give Back Gains to Keep Jobs; Ilitch gets richer
• Forbes says Ilitch worth $2 Billion; Ranking #212 among Richest Americans, #5 Richest in Michigan
• Detroit #1 on Forbes' List of America's Most Dangerous Cities!
• Ilitch Gets Richer on the backs of Detroit's working class; Detroit still America's most Dangerous City
• Ilitch Unlikely to get Taxpayer Subsidies for a New Detroit Hockey Arena

MotorCity Casino Workers Give Back Gains to Keep Jobs; Ilitch gets richer

Casino workers agree to givebacks

Greektown's unions vote for deal with health care changes

10.26.2011

Detroit— Workers voted Tuesday to ratify a four-year agreement with MotorCity Casino.

Nearly 70 percent of the MotorCity workers who voted approved the new contract, compared to 74 percent at Greektown on Monday.

Union workers at MGM Grand Detroit will vote Thursday.

"As a trustee of the local and a member of the bargaining team for Teamsters Local 372, I'm elated with the 'yes' vote," valet Mark Williams said in a statement issued Tuesday night by the local, which represents valets, front desk staff, phone operators, warehouse, grounds and general workers. Williams has worked at MotorCity for nine years.

"This was a tough set of contract talks when you factor in the difficulty of our region, but our bargaining team worked hard with our membership and at the negotiation table to get the best possible agreement for our members," said Dave DeLong, president of Teamsters Local 372.

The Detroit Casino Council, a coalition of five unions, including the Teamsters, represents nearly 6,000 union members at Detroit's three gambling houses. While the Detroit Casino Council did not release details, UNITE HERE Local 24 indicated on its website that workers would make monthly payments on health care coverage.

Greektown, which last year emerged from bankruptcy protection, has posted a 1.8 percent revenue loss through the first nine months of the year.

Revenue grew at MotorCity and MGM Grand through the first three quarters this year.

"It seems to me that this is a tough time economically, and workers in many industries, especially unionized workers in nontechnology industries, are being convinced they have to give back gains to save jobs," said Frank Fantini, editor and publisher of Fantini's Gaming & Lodging Reports in Delaware.

All three casinos assumed large debt loads to build new casinos and hotels required by Detroit, said Jake Miklojcik, a Lansing-based gaming consultant who sat on Greektown's board of directors during bankruptcy. The casinos make mediocre profit margins compared with other industries, he said.

"You don't have as much wiggle room because of the debt," he said.

Forbes reported in September that Mike & Marian Ilitch are worth $2 billion.  That's up from $1.7 billion in 2010.  Marian Ilitch owns Detroit's MotorCity Casino.

See also:

• Forbes says Ilitch worth $2 Billion; Ranking #212 among Richest Americans, #5 Richest in Michigan
• Detroit #1 on Forbes' List of America's Most Dangerous Cities!
• Ilitch Gets Richer on the backs of Detroit's working class; Detroit still America's most Dangerous City
• Ilitch Unlikely to get Taxpayer Subsidies for a New Detroit Hockey Arena

MotorCity Casino Workers will Vote on Tentative Labor Agreement Tuesday

Greektown Casino workers OK agreement

10.24.2011

By Joe Rossiter

Workers at Greektown Casino voted today to ratify a new, four-year agreement by a margin of 3-1, said Shawn Ellis, communications director for Teamsters Local 372.

The union vote was the first of three that will take place in the next several days. MotorCity Casino workers will vote on the tentative agreement Tuesday, and MGM Grand Detroit workers will vote Thursday. Voting will take place at the Teamsters facility at 2800 Trumbull Ave... (Complete Story)

Motor City Casinos to Detail Deal to Workers

Casinos to detail deal to workers

10.21.2011

B y Louis Aguilar

laguilar@detnews.com

Detroit casino workers should get details of the tentative deal reached by five unions and the three gaming halls starting possibly as early as Saturday.

Union members will be briefed on the agreement this weekend, said Michelle Martin, spokeswoman for the United Auto Workers international union, whose Local 7777 was involved in the Detroit Casino Council talks with MGM Grand Detroit, MotorCity Casino-Hotel and Greektown Casino Hotel. A tentative deal was reached Wednesday.

On their websites and Facebook pages, the UAW local and UNITE HERE Local 24, which represents hospitality workers at the casinos, were not providing details of the tentative four-year agreement or even given a firm date and time when agreement briefings for members would be given. None of the casinos would reveal or confirm any details of the tentative contract.

The deal would cover the 7,090 licensed employees at the three casinos, and other workers who are not required to be licensed by the state's regulatory board.

Detroit has the country's fifth largest casino gaming market. Last year, the three casinos generated $1.38 billion in revenue, a 3 percent increase over 2009.

Some union workers have already declared they don't like the tentative deal. They have posted comments on the UAW Local 7777's Facebook page worrying that the four-year deal doesn't give them a sufficient pay hike and may increase health care premiums.

One worker identified as Carrie Williams said she worries that union families "cannot afford this contract." The casinos pushed for workers to pay for more of their health care coverage during this year's negotiations and in 2007.

Workers at all five unions authorized a strike if negotiations failed.

Thousands Threaten to Strike Motor City Casinos at Midnight

3 Detroit casinos face strike threat at midnight by thousands of workers

 10.18.2011

By Matt Helms

mhelms@freepress.com, @matthelms or 313.222.1450.

Thousands of unionized workers at Detroit’s three casinos are threatening to strike if management and labor can’t reach a deal by midnight tonight.

Negotiations were ongoing today after being extended for 48 hours past a Sunday deadline.

Representatives of several of the five unions on the Detroit Casino Council, representing dealers, hotel and restaurant workers, engineering, maintenance and other fields, couldn’t be reached this
morning.

UNITE-HERE Local 24, which represents hospitality workers at the casinos, said in a statement that members of the casino council on Oct. 11 approved a strike vote “by a margin of 97% in order to maintain the wages, benefits and working conditions they deserve” if an agreement isn’t reached.

Motor City Casino-Hotel spokeswoman Jacci Woods said only that management and the unions “have agreed to continue to meet and negotiate in good faith in hopes of reaching an agreement on a new contract prior to the new deadline.”

Greektown Casino-Hotel declined comment. MGM Grand Detroit officials couldn’t immediately be reached.

These are critical times for the casinos.

Despite having done well in the recession compared to the U.S. gambling industry as a whole, they're heavily indebted and face growing competition from Michigan’s Indian casinos and a new gambling hall set to open in Toledo next year.

Even third-place Greektown, which went through bankruptcy from which it emerged in June 2010, would have fared better without the debt all three casinos took on to build 400-room hotels required under city licensing deals, said Lansing-based casino analyst Jake Miklojcik.

“It’s like having a $300,000 house with a $600,000 mortgage,” said Miklojcik, a member of the board at Greektown during bankruptcy.

Motor City Casinos Nearing Union Contract Deadline

Deadline looms in Detroit casino contract talks

10.18.2011

By JACLYN TROP

jtrop@detnews.com

313.222.2575

Contract extension with unions is set to expire at midnight

The New Contract Affects Dealers, Bartenders And Others Involved With Gaming

Detroit's three casinos and their unions face a midnight deadline tonight to reach a new deal before a contract extension expires.

MGM Grand Detroit, MotorCity Casino-Hotel and Greektown Casino Hotel as well as UAW Local 7777 and other unions are negotiating on economic issues.

Members of the unions' Detroit Casino Council have approved a strike if an agreement is not reached by the deadline "to maintain the wages, benefits and working conditions they deserve," according to a statement by Hotel Employees and Restaurant Employees Local 24, which represents cleaning, maintenance and other workers.

The Detroit Casino Council includes workers from Local 24; UAW Local 7777, which represents dealers and slot technicians; Teamsters Local 372, which represents valet and warehouse employees; Operating Engineers Local 547, which represents engineers and other trades positions; and the Michigan Regional Council of Carpenters.

"MotorCity Casino Hotel and the Detroit Casino Council have agreed to … continue to meet and negotiate in good faith in hopes of reaching an agreement on a new contract prior to the new deadline," said MotorCity spokeswoman Jacci Woods in an email.

"I am unable to comment while negotiations are in process," said MGM spokeswoman Yvette Monet in Las Vegas.

Greektown had no comment. UAW Local 7777 did not return calls for comment.

Revenues by the three casinos have increased 2.9 percent through the first nine months of this year compared with the same time last year, according to the Michigan Gaming Control Board.

The two largest gaming halls — MotorCity and MGM Grand — have experienced revenue increases through the first three quarters. Greektown, which last year emerged from bankruptcy protection, has posted a 1.8 percent revenue loss through the first nine months of the year.

National gaming analyst Frank Fantini has said the Detroit casinos' results reflect gains from the economic recovery.

It remains uncertain how much of the revenue increases are fueled by promotional free-play credits that customers redeem at casino games.

Unlike some other states, Michigan requires casinos to count free-play incentives as official revenue.