A statewide initiative to amend the Michigan Constitution to permit adding eight casinos in the state, including one in the city of Detroit, is raising eyebrows and interest among Michigan residents desperate for the type of economic infusion casinos have proven capable of delivering.
Work is already under way to gather the required signatures to place the proposal on the November 2012 General Election ballot, according to Citizens for More Michigan Jobs (CMMJ), the statewide developer group proposing the eight casinos.
The group needs to collect 322,609 signatures by July 9 to place its proposal on the Nov. 6 ballot. For any of the individual casinos to go forward, the proposal would need to have a majority of “yes” votes in that community in addition to statewide approval.
If successful, these casino operators will join the three privately owned casinos in Detroit and the 22 Indian-run operations throughout the state.
The proposed casino locations include Detroit, Pontiac, Romulus, Macomb County’s Clinton Township, Grand Rapids, DeWitt Township (near Lansing), Birch Run Township (in southern Saginaw County) and Clam Lake Township (near Cadillac).
EXPANSION ROOM?
Detractors of the initiative are already arguing that Michigan’s casino market is saturated and that new entries would jeopardize the sizeable tax revenue generated by the existing casino operations.
Given Michigan’s languishing economic recovery, many CMMJ supporters are asking: is this the right time to hang out the “closed to new business” sign in the state?
Ballot proposal supporters hope that Michigan residents will not drive investment dollars away.
What’s at stake?
An estimated 16,000 permanent jobs will be created in the state, including approximately 4,200 high paying union jobs in Detroit comprised of 3,000 permanent full-time and 1,200 construction jobs, according to a CMMJ release.
“Detroit residents will have the first opportunity for the Detroit casino jobs and Wayne County residents outside of Detroit will have the second opportunity to be hired,” according to a CMMJ spokesperson.
New jobs and increased state and local tax revenues are the primary reasons that CMMJ submitted the Constitutional amendment petition to the Michigan Board of Canvassers. The petition was approved to allow the collection of 322,000 required signatures to place the casino initiative on the November ballot.
HARD NUMBERS
It is projected that the state and local tax benefits of adding the proposed eight casinos are significant. For example, in 2010 the 22 tribal casinos contributed $61 million in state and local taxes, the three Detroit casinos paid $100 million in state taxes and $164 million in taxes to the city of Detroit.
The eight new casinos estimate contributing an additional $300 million annually to state and local governments to benefit schools, police and fire protection and road repairs. Tax revenue generated in Detroit is conservatively estimated as gross taxable receipts of $226 million according to the 2010 Innovation Group’s study.
The Citizens for More Michigan Jobs proposal increases the Gaming Tax rate from 19 to 23 percent with a formula that increases Detroit’s distribution to 60% and decreases the State’s to 40%. This would mean an estimated $56 million annually for Detroit from this Fourth Casino, and as much as $50 million in additional tax revenue from the three existing casinos, all dedicated for Detroit’s police and fire. Additionally, the State taxes are now dedicated to K-12 education and road repair.
The seven casinos outside of Detroit have a different gaming tax formula for the 23 percent that includes the host city, host county, additional state wide funding for K-12 education, police and fire, and gaming addiction. With 20% of the tax going to cities like Pontiac and Romulus, these casinos would have a significant impact on their local residents.
BATTLE LINES FORM
But opponents, who say the state is already at full capacity for gaming, aren’t buying the projections math.
“We’re talking about doubling the number of casinos in this state, and we know that we’re simply beyond the ability to open another casino and see any meaningful economic growth or any real jobs that would be created,” says James Nye with Protect MI Vote, a group representing several casinos and tribes across the state.
Protect MI Vote has raised $50 million to fight the expansion effort.
FAMILIAR FACES
With more than one-hundred local investors, Citizens for More Michigan Jobs includes the local development team for the new Detroit casino, Detroit Casino Partnership (DCP). DCP key investors are Detroit funeral director O’Neil Swanson, Four Tops singer Duke Fakir, boxing promoter Emanuel Stewart, radio personality and cable veteran Wade “Butterball Jr.” Briggs and president and CEO of the DCP, Andrew McLemore, Jr. DCP ownership is local and revenue generated stays in Detroit.
Detroit Casino Partnership’s plan will “raise the bar, creating a much broader entertainment experience for the customer,” say its members. “Tourism is Michigan’s second largest industry yet Detroit has not realized its full potential as an urban entertainment destination.
Assets like sports teams and events, our international boarder, and a long music history can be leveraged to make Detroit more of a destination. We see the job growth for Detroit extending far beyond the walls of our facility.”
The statewide signature drive is the first hurdle that organizers must clear in order to deliver the 4,200 promised jobs.
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