Detroit's casinos could emerge as winners from the temporary closure of Caesars Windsor, especially if the Canadian labor strike that shuttered the entire casino and hotel complex on Friday drags for weeks or months.
The last strike by Caesars Windsor workers lasted 42 days in 2004 and reportedly hurt the casino in its competition for regional market share with the three Detroit casinos. It also led to the layoff of hundreds of employees.
The Detroit casinos — MGM Grand Detroit, MotorCity Casino Hotel and Greektown Casino-Hotel — could again experience a boost in business from having one fewer competitor. Yet any upswing would be short-lived if Windsor's casino quickly reopens.
Read more:
However, Caesars could experience longer-term damage if the closure lasts long enough to loosen the loyalty ties of some of its regulars, said Lansing-based consultant Jake Miklojcik.
Next to convenience and a clean, attractive building, customer loyalty is considered one of the biggest factors in the casino business for getting visitors through the door, he said.
"Loyalty is very important. That's why you have all these fancy point systems and cards," Miklojcik said. "If people who prefer Windsor start testing other places, maybe Detroit, it could have an effect."
To be sure, no one is expecting all of Caesars' business to flow across the border during the strike.
Many regular customers, particularly Canadians and those in Caesars' popular Total Rewards benefits program, may simply stay home and wait for the casino to reopen, industry experts said.
"I don't think that someone who is a die-hard Total Rewards member is going to look at something like this and decide he wants to be loyal to a different property," said Alex Calderone, managing director of Birmingham-based Calderone Advisory Group.
The Windsor Star reported that 1,900 of the casino’s 2,300 employees on Thursday voted 59% against a new three-year contract.
The proposed contract had called for $1,150 (Canadian) signing bonuses for full-time employees, $900 for part-time employees and $500 for casual employees, plus a 75 cents-per-hour immediate raise, 50 more cents in April 2019 and another 50 cents in April 2020. There was also a pension increase of 1% for employees, the newspaper reported.
Caesars employees very generally are paid $15-$30 an hour, according to a copy of the expired contract, with dealers and food servers also earning tips.
Moody's Investors Service issued a report last month that said Caesars Windsor has become less of a competitive threat over the years to Detroit's casinos because of more inconvenient border crossings, as well as the smoking ban enacted at the casino a decade ago.
Caesars Windsor's owner, the Ontario Lottery and Gaming Corp., does not disclose financial performance results for its individual casino properties.
The three Detroit casinos reported $1.4 billion in gambling revenues for 2017, their best performance since 2012, the year Hollywood Casino Toledo opened. The revenues included $113 million in state wagering taxes and $177 million in taxes to the city of Detroit.
These total revenue figures did not specify profits or include the casinos' nongaming revenues from sources such as hotel rooms, banquets and food sales.
The Moody's report also said that strong and stable revenues have allowed MotorCity and Greektown casinos to chip away at their substantial debt.
Workers at Detroit's three casinos ratified their current five-year contract in December 2015.
Contact JC Reindl: 313-222-6631 or jcreindl@freepress.com. Follow him on Twitter @JCReindl.
Join the Conversation
To find out more about Facebook commenting please read the Conversation Guidelines and FAQs