Detroit’s Greektown Casino Hopes Remodel Will Drive Up Revenue
The Greektown Casino-Hotel in Detroit is the smallest of the embattled, bankrupt city’s three land-based casinos, but it is owned by a man who has big plans not only for the property, but also for the city in which it is located.
The Detroit Free Press reported this week that despite the fact that the Greektown Casino-Hotel was $31 million in the red last year, new owner Dan Gilbert of Quicken Loans fame is planning to infuse millions of dollars in cash into the place in the hopes that a remodel can help drive the property to a place of better cash flow.
New machines, better facilities planned
The Greektown Casino-Hotel is owned by Gilbert’s Rock Gaming, a company that also operates brick and mortar casinos in the state of Ohio and has a casino development planned for Baltimore, Maryland, a state that has in recent years seen explosive growth in gaming, thanks in part to its proximity to the nation’s capitol, Washington D.C.
Last week, Rock Gaming put out a report detailing the Greektown Casino-Hotel’s finances for 2013, in which they divulged an almost $31 million operating loss for the year.
As part of an effort to push things toward the black, the Detroit Free Press says that Gilbert, who is undertaking an urban revitalization project in Detroit’s core that resembles what Zappos founder Tony Hsieh is attempting to do in downtown Las Vegas, will put up between $125 million and $150 million to renovate and remodel the casino.
Greektown came out of bankruptcy protection four years ago, in June of 2010, and has not turned a profit since.
The remodeling will encompass such projects as adding new slot machines, reconfiguring parking, and redesigning an entrance that has been described as “confusing” to those unfamiliar with the layout of the property.
In part, last week’s report read, “We are planning to create a more open, spacious and inviting atmosphere as well as enhance our gaming offering, which we believe will enable us to attract new patrons and drive increased customer loyalty.”
Development in Ohio has hurt Michigan’s casinos
The paper attributed some of the casino’s losses to competition created with the opening of a new land-based casino in Toledo, Ohio, not too far from the Motor City.
The story of casinos struggling to keep pace – and to keep up revenues – in the face of increased competition from properties located across state lines is nothing new.
In fact it is a tale that is playing out all over the United States as casinos compete for the same gamblers and work to best each other in terms of newness of games, amenities, entertainment, dining, retail, and the like.
States continue to engage in casino expansion race, both offline and online
And, it is a story that is likely to continue to unfold as states seek new sources of revenue not only by permitting the construction of new brick and mortar casinos, but also begin to explore the possibility of allowing residents access to real money online poker and other forms of Internet-based wagering.
Already, three states in the nation permit such web sites.
Delaware, Nevada, and New Jersey all launched real money online gambling industries last year, and a widely-cited report put out earlier this month by Gamblingcompliance.com suggests that 10 more states, including such populous ones as California, Pennsylvania, and Illinois, are all set to explore online wagering regulation in the coming year.
