MGM's casino hits big jackpot

New gaming hall's take jumps 56% in first month

Jennifer Youssef / The Detroit News

DETROIT -- MGM Grand Detroit raked in a record $54.9 million in October, thanks to the opening of its swanky $800 million hotel, casino and entertainment complex.

The double-digit growth -- up 55.9 percent from September and 38.6 percent from October 2006 -- was a good start for MGM, but industry watchers wonder whether October's growth is sustainable. The expansion has attracted throngs of new customers, but will they continue as the newness fades?

"Clearly, this is very impressive," said Jacob L. Miklojcik, a national casino consultant and president of Michigan Consultants in Lansing. "It's a very encouraging number, that's for sure. This appears to be mainly new growth, but the first year could be the best year because people want to try it out."

Industry watchers said the jump was almost purely from new gamblers and not from customers wooed away from MotorCity and Greektown, where revenues remained relatively flat for the month.

MGM's October numbers were up $19.7 million from September's $35.2 million. The casino raked in $41.6 million in September 2006.

Revenues were up $15.3 million from $39.6 million in October 2006. MGM was closed a couple of days last month to make the transition to the permanent casino.

State and city coffers also benefited from MGM's surge, with the casino paying $6.6 million in taxes in October, up $2.4 million from September and $1.8 million from October a year ago. The city and state divide the tax revenues.

MGM spokesman Scott Grigg said he was pleased with the growth, noting the numbers were "on par with our expectations."

"We're glad that the other (casinos) did well and MGM did not take away their customers," he said.

At Greektown Casino, revenue totaled $25.6 million in October, down 1 percent from a year earlier. At MotorCity, which endured a brief shutdown due to labor negotiations, revenues were up 1 percent to $37.7 million.

The renovations at all three casinos are good for the city and the local economy, said Rick Kalm, executive director for the Michigan Gaming Control Board.

"If each of these casinos improves their venues, you're going to continue to see increases" in revenue, he said.

At Greektown, the $200 million hotel and gaming floor expansion will be open late next year, spokesman Roger Martin said. But revenues should pick up sooner with the casino's new parking garage.

"Even with the construction challenges, our customers persevered and we're very grateful to them," he said. "Our best months and years are still ahead of us."

As part of its $275 million expansion, MotorCity Casino will open its 400-room luxury hotel on Nov. 28. Other amenities will open in early 2008; the casino opened in June.

Miklojcik said he was glad to see Detroit's gambling facilities reinvesting money in their buildings and operations. "You've got to run harder to stay in place," he said. "There will be some growth in money that would have gone out of state."

The new and improved casinos also are attracting more business conventions to Metro Detroit, said Christopher Baum, senior vice president of sales and marketing at the Detroit Convention and Visitors Bureau.

Many gamblers, companies and professional associations are looking to visit an entire weekend instead of just one day, he said. There's been a 71 percent increase in the number of companies checking out Metro Detroit as a convention site, he said.

"The casinos add to the level of sophistication and entertainment available in downtown Detroit," Baum said. "We really turned a corner in terms of perception of the city of Detroit."

Marjory Elbert of Livonia is a fan of the new MGM Grand. "How lucky we are to have such nice entertainment venues right in our backyard," said the 63-year-old retired administrative assistant. "It's as fun as going to Las Vegas, but I don't have to get on a plane."