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Wednesday, November 10, 1999
Copyright © Las Vegas Review-Journal
MGM casino fills Detroit tax coffers
Associated Press
DETROIT -- MGM Grand Detroit says the city and state made more money from the casino in its first 64 days than the casino itself did.
The casino earned $8.2 million in net profit and paid $15 million to the city and state in taxes, spokesman Bob Berg told the Detroit Free Press. MGM Grand released the tax and profit figures Monday.
Of the $15 million, the city got $7.8 million and the state $7.2 million.
The city and state split an 18 percent gambling-win tax, with 55 percent going to the city and 45 percent to the state. The casino also pays flat taxes to the state for the cost of regulating it and to reimburse the city for police and fire protection.
"The economic impact for the entire city and region goes well beyond the gaming taxes we're paying," said Alex Yemenidjian, president of MGM Grand.
The numbers also indicate that the casino pulled in slightly more from gamblers than previously thought -- just more than $1.1 million per day. The casino opened July 29.
"It's off the charts, tremendously successful," said Joe Coccimiglio, gambling analyst for Prudential Securities in New York City.
Detroit Finance Director Ed Hannan said the casino tax money goes into the general fund and is used for everything the city provides, from garbage pickup to parks.
The city budgeted $51 million in gambling taxes in the current fiscal year from the three casinos. It had expected all three to be open by now. The fiscal year runs to next June 30.
"It's still possible to make that $51 million, but it depends on when the other casinos open," Hannan said. "It's also a hard number to predict."
The state taxes help pay for education.
On Monday, the state gambling board set Dec. 14 as the date for the final licensing hearing for the MotorCity Casino, a joint venture of the Atwater Casino Group and Mandalay Resort Group. The Greektown casino is not expected to open until February or March.
MGM Grand's profits likely will drop once the other two casinos open.
Gambling analyst John Rohs from Schroder Securities said he expects MGM to continue to keep its lead as the top-grossing casino, followed by MotorCity, Greektown and Casino Windsor, in that order.
(PROFILE
(CO:MGM Grand Inc; TS:MGG; IG:ENT;)
(CAT:Education;)
(CAT:Gambling;)
(CAT:Municipal;)
(CAT:Travel;)
(SRC:AP; ST:MI;)
) NY-11-09-99 0358EST
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