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Michigan Casino Industry Suffers Losses While Remaining Shut Due to Coronavirus Shutdown

Businesses across the state of Michigan are beginning to reopen as the local authorities are starting to relax some of the restrictions that have been imposed during the coronavirus pandemic. Although some of the retail businesses are able to resume operations under some special measures, one of the major industries in Detroit – the casino industry – remains shut.

The three casinos in Detroit employ thousands of people and provide both the state of Michigan and its largest city with tax revenue amounting to hundreds of dollars every year, making local casinos the third-biggest revenue source of Detroit. Unfortunately, the retail casino industry in Michigan has been inoperable since March 16th, with casino workers struggling with unemployment. According to some analysts, the lengthy shutdown that has led to a drop in betting tax revenue could end up creating a massive budget problem.

According to experts, it would be challenging for the state to find another revenue source to fill that hole, especially considering the fact that it comes to losses amounting to about $500,000 every day. On the other hand, significant financial challenges are being faced by local casino workers, who have been temporarily dismissed from their jobs and are among the 2.2 million residents of the state who have filed new jobless claims since the middle of March 2020.

Most individuals who have filed such claims have been granted unemployment benefits, but others had theirs ceased as part of a probe into an alleged fraud that has affected hundreds of thousands of people in Michigan.

Hundreds of Thousands of Michigan Residents Had Their Unemployment Benefits Frozen

As mentioned above, hundreds of thousands of residents of Michigan had their unemployment accounts frozen because of an ongoing investigation into suspected cases of fraud. Previously, the US Secret Service issued a warning regarding criminals attempting to take advantage of unemployment programs.

By June 12th, 2020, a state task force had managed to resolve more than 140,000 cases, with another 400,000 of suspected fraud being under investigation. The authorities confirmed that everyone who had their unemployment benefits frozen as part of the probe but was legitimately receiving them will get the money they are owed. At a press conference that took place on June 17th, Michigan Governor Gretchen Whitmer explained that the state authorities would continue working until everyone eligible for the benefits receive them.

As for the gambling sector in the state, tribal casinos across Michigan were allowed to resume operation. The state suffered a serious blow by the Covid-19 infection, with more than 60,000 cases of coronavirus and more than 6,000 deaths reported. For the time being, there are still controversial opinions among employees about the reopening of local casinos. Some of them are willing to get back to work and are ready to take the risk, but others remain concerned about safety.

Casino closures, however, have left a massive hole in Detroit’s budget. According to a February report, casino taxes were expected to account for 17% of the general fund revenue of the city for the current fiscal year. However, a 51% decline in gambling tax revenue was marked through May, and back in April city authorities said they were expecting about $112 million less in gambling revenue than the one projected in February.

 Author: Harrison Young

Harrison Young is an experienced writer, who started his career almost 8 years ago. Prior to joining our team at CasinoGamesPro, he worked as an editor for a small magazine.