Detroit betting heavily on casinos
Revenues up, but questions persist
DETROIT -- It's 1 a.m. on a Wednesday and the waitresses in short black skirts and sleeveless red shirts stride through the crowd, shouting over the constant din of coins dropping and chips clashing.
"Drinks! Beverages!"
NBA star Rasheed Wallace saunters past a $2,500 Baccarat table and takes a seat in the corner of the Grand
"It's like hypnotism. When you play you're in another world," said McNeil, who drove 20 miles with her sister to spend several hours at the MGM Grand in downtown Detroit. "There's something about the casino. You forget everything when you come here."
Over the past eight years, Detroit has brought three casinos into the heart of the city, revitalizing portions of its downtown and becoming the most populous American city with a casino inside its borders.
The casinos, catering to high rollers and working folks, have added nearly 7,000 jobs, which average $54,532 in annual wages, tips, and benefits, according to figures compiled by the American Gaming Association, a Washington-based gaming advocacy organization.
Last year they brought in $1.3 billion in revenue, of which 12.1 percent, or $158 million, went to the state of Michigan and 11.9 percent, or $155 million, to the city of Detroit.
The city has built more hotels in the past five years than in the previous 25 years, according to city officials, diversifying the tax base and turning the Motor City into the fifth highest-grossing casino market, falling just behind Connecticut.
"People thought Sodom and Gomorrah," said Matt Allen, spokesman for Detroit's mayor, Kwame M. Kilpatrick. "But none of that has happened. There's a synergy here. You can feel it, and you can see it. We don't really see any downside."
The casinos have not brought the crime that critics warned about, but gambling specialists contend that big-city casinos aren't the windfall that proponents claim. They bring in less money than rural destination casinos, target people least able to afford to gamble, and take business away from local restaurants, the specialists say.
It could all be part of what's to come for Boston, where Mayor Thomas M. Menino is vociferously arguing for a resort-style casino -- with hotels, shops, and Vegas-style shows -- to be built at Suffolk Downs, which covers about 170 acres in East Boston and Revere.
"The location is perfect; it's six minutes away from the Sumner Tunnel, and it's accessible by many roadways," Menino said in a recent interview. "I see a glorious location in Boston, with a lot of benefits to our community. I think it's a great opportunity.
"When you think about how many people go down to Connecticut every day to bet -- that money should be staying in Massachusetts."
In the next few weeks, the Boston City Council is to start holding hearings on the idea.
At the same time, the Mashpee Wampanoag tribe has a deal with the town of Middleborough for a $1 billion resort casino and is seeking state and federal approval. The operators of the Mohegan Sun casino in Connecticut said last week that they want to open a casino in Palmer. And developer Sheldon Adelson visited Beacon Hill last week to push a proposal for one near Marlborough.
State Treasurer Timothy Cahill said the state should negotiate with commercial developers to open several destination casinos. By Labor Day, Governor Deval Patrick is expected to disclose his position on expanding gambling in Massachusetts.
A poll conducted last year by the Center for Policy Analysis at the University of Massachusetts at Dartmouth indicated that 56.5 percent of the 1,041 Massachusetts residents surveyed supported resort casinos in Massachusetts. When asked to rate a location for a casino, residents ranked, in order, Western Massachusetts, Boston, and the New Bedford/Fall River area.
About 15 years ago, Michigan was in a similar position. Casino gambling was illegal, and it faced multiple legislative hurdles. The governor and many legislators opposed it. But a group of procasino activists gathered enough signatures to force a ballot question in 1996. It narrowly passed, in part because a casino had just opened across the border in Windsor, Ontario, and was drawing Michigan residents by the busload.
"People here all of the sudden thought, 'Maybe we ought to have our own one of those over here,' " said John W. Carroll Jr., senior vice president of business development for the Detroit Regional Chamber, a business group that initially opposed the casinos but now counts all three as members.
The MGM Grand Detroit opened in July 1999 inside a former Internal Revenue Service office building. Five months later, MotorCity Casino opened in a former Wonder Bread factory. A third casino, Greektown, opened in November 2000. Those casinos were meant to be temporary locations, and they are all planning to complete massive expansions within the next year, adding new and renovated facilities and 400-room hotels.
By almost any measure, the casinos have bolstered the local economy, helped spur new professional sports complexes and loft-style developments and supplied much-needed nonautomotive jobs.
"They're good, steady jobs, and, boy, do they help the city's budget tremendously," said George Jackson, the mayor's chief development officer and president of Detroit Economic Growth Corp. "And in this down economy that we have in this area, the casinos are the one bright spot. They are major employers."
Detroit was and is in far worse economic straits than Boston. As Big Three automakers lost their primacy in the market and moved some operations from the region, many residents fled and the rates of crime and poverty surged. The population of the Motor City, which was 1,850,000 in 1950, is now 836,000.
Supporters also acknowledge that the casinos have done little to draw tourists to Detroit, unlike destination casinos in rural areas, such as Foxwoods and Mohegan Sun in Connecticut. Nearly all of the cars at the Detroit casinos are from Michigan, and a 2003 Michigan State University study suggested that about 80 percent of gamblers came from three surrounding counties.
One challenge for urban casinos, casino specialists said, is trying to avoid hurting area businesses while holding on to patrons for as long as possible by offering free drinks, long buffets, and reasonably priced hotels. There are 460 commercial casinos in 11 states -- more than half of which are in Nevada -- but few are in urban areas.
"In New Orleans, the merchants weren't all in favor of the casinos," said David G. Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas. "Imagine you're a bar on Bourbon Street. You want people coming to drink hurricanes and screwdrivers there, not going to play blackjack where they can drink for free."
At 8:30 p.m. the same day as Betty McNeil sat in front of the slot machine, Carl's Chop House, a wood-paneled Detroit institution known for its steaks and prime rib, was empty, with no cars in its valet parking lot and only a half-dozen employees inside the 1,000-seat restaurant.
The 87-year-old restaurant is across the street from MotorCity Casino, which houses Iridescence, where Bud Lights arrive in cone-shaped glasses, Porterhouse steaks go for $64, and Chardonnay jelly is served before the main course to cleanse the palate.
"They don't help anyone but themselves," said Frank Passalacqua, owner of Carl's Chop House. "They don't care about us."
Crime in Detroit has not seen the surge that casino opponents predicted. Downtown, where the three casinos are located, the number of serious crimes such as homicide, rape, robbery, and assault dropped 22 percent, from 3,027 in 2001 to 2,345 in 2004, according to a study by Wayne State University's College of Urban, Labor, and Metropolitan Affairs.
But Gamblers Anonymous meetings have proliferated, and the number of addicts who ask to be added to a state list that bans them from Detroit casinos for life has increased dramatically, from 56 in 2001, when the program began, to 1,223 in 2005.
"People are losing everything they have," said Douglas Aune, 45, who came with his wife to the cavernous MotorCity Casino last week. "You get laid off, you get behind on your bills, and you come here and think your luck will change."
As he turned back to the nickel slot machine he had been playing for the past two hours, Aune said he has learned to leave all debit cards at home.
"Blackjack, I would bet my paycheck," he said. "I love that game so much."
Matt Viser can be reached at maviser@globe.com. 
