A proposed 16 per cent increase for casinos in Detroit, US, could threaten jobs, it has been claimed.
The Michigan Chamber of Commerce warned that if the city of Detroit imposes such a tax hike it would heap even further financial pressure on the city’s gaming businesses - MGM Grand Detroit, MotorCity Casino Hotel and Greektown Casino Hotel.
Detroit Mayor Dave Bing is understood to be keen to increase taxes paid by the city’s casinos to help balance its budget.
"Detroit’s three casino operators have made a substantial financial commitment to the city, investing millions of dollars in first-class facilities and creating thousands of good jobs for hard-working city residents," said Rich Studley, president and CEO of the Chamber. "Now is not the time to impose a multi-million dollar tax penalty on these critically important job providers."
Detroit, he said, has one of the heaviest tax burdens in the state and also one of the highest rates of unemployment.
"Detroit is still Michigan’s largest city and we hope it will return to greatness. Instead of raising city taxes, Mayor Bing and the city council need to take action to substantially reduce spending, overhaul unsustainable employee benefit and pension plans and streamline burdensome regulations. In the meantime, we strongly urge the Michigan legislature to reject the proposed job-killing tax increase on Detroit casinos."
Revenues at Detroit casinos for the three months to February were up 1.75 per cent on the same period last year. Revenues for MGM, MotorCity and Greektown were $145m, $116m and $82m, respectively. Gaming taxes paid during this period were $27.7m, compared with $30.7m a year earlier. Taking into account the fees they pay to the city and state, the three casinos effectively pay a 24.5 per cent tax rate.
In a joint statement, Detroit’s casino operators said they were "united in disappointment" at the proposal.
"This proposal couldn’t come at a worse time," they said. "Detroit’s local businesses must remain competitive as casinos open in Ohio and there is constant pressure to expand gaming elsewhere in Michigan.
"Limiting our ability to reinvest may result in the city losing far more than anything gained by the proposed increased rate."
