Casinos, racetracks betting on the future

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By VINCE BOND Jr.
Capital News Service
LANSING- What are the odds of the Michigan gaming industries beating the recession?
Although the economic downturn dealt the casino industry a bad hand, some are altering their strategies rather than cashing in their chips. And horse tracks are preparing to round the final curve in hopes of surviving a competitive gaming market.
During these vulnerable times, the Soaring Eagle Casino and Resort in Mount Pleasant is looking to broaden its customer base and become a national travel destination, said Frank Cloutier, public relations director of the Saginaw Chippewa Indian Tribe.
The tribe owns Soaring Eagle and the nearly 2-year-old Saganing Eagles Landing Casino in Standish.
With revenues down 10 percent this year, the casino is “revisiting” its marketing campaign, adjusting food prices and preparing to replace its nearby Soaring Eagle Inn with a resort complex that will include an indoor water park.
Construction is to begin in March with plans to complete the project before the end of 2010.
The resort will be an integral piece of the casino’s national marketing blitz, Cloutier said.
“When the economy is bad you reinvent yourself. We knew it would be tough,” he said. “People are still out and about, but they’re just being more conservative. They don’t bring as much revenue with them.”
Soaring Eagle’s traditional clientele is the 50-and-up crowd, but it seeks to target young professionals in an effort to reclaim the 8 percent of the market share it lost when Detroit casinos opened at the beginning of the decade, Cloutier said.
While Soaring Eagle overhauls its image, the MGM Grand Detroit casino is riding out the economic storm with flexible offerings, said Jamaine Dickens, its media consultant.
And building a new facility at the onset of the recession hasn’t prevented MGM Grand from maintaining its dominance of the city’s casino market.  The casino and hotel opened in October 2007.
“We’ve been relatively stable,” Dickens said. “We are able to key in on our customers’ needs and wants. Our customers expect the best.”
Dickens said flexibility has allowed the $800 million complex with 400,000 square feet of gaming space, 400 hotel rooms, a 30,000-square-foot event center and the only four-star spa in the state, to grab 41 percent of Detroit’s $1.3 billlion annual casino sector.
“I don’t think anything surprises us in these economic times. We understand that when the economy is struggling, people have to take a closer look at their budgets,” Dickens said.
So far this year, MGM Grand has taken in $457 million, compared to MotorCity Casino’s $376.4 million and Greektown Casino’s $289.2 million, according to the Gaming Control Board that oversees Detroit’s three casinos.
Eric Bush, administrative manager of the board, said profits for Detroit’s three casinos rose from $1.33 billion in 2007 to $1.35 billion last year, although he expects a slight downturn when this year’s figures are tallied.
Despite its bankruptcy filing, Greektown saw an 18 percent increase in October’s year-to-year revenues and a 4 percent rise from September.
Bush said numbers are encouraging considering that there are pockets in the state where unemployment is more than 15 percent.
“Greektown should be emerging from bankruptcy fairly soon,” Bush said. “It defies conventional economic wisdom that, with the sad state of employment, we would be seeing little or no change” in gambling profits.
The Detroit casinos also compete with the Caesars Windsor casino in Ontario.
Horse Racing
As revenues for Sports Creek Raceway in Swartz Creek continue to decline, so have the numbers of live races at the track, said Chris Locking, general manger of the complex.
With less revenue to work with, the track can’t pay as much purse money, Locking said.
During the mid-1990s, Sports Creek hosted races 125 to 130 days each year.  The upcoming season, which begins Nov. 27, will consist of only 31 days.
Dan Rakieten, general manager of the Okemos-based Michigan Harness Association, said many of the state’s jockeys head to tracks in Ohio, Indiana, New Jersey, Virginia, and Canada to make a living.
Live races have fallen 35 percent in the past year and wagering is down 30 percent, Rakieten said.
When the Detroit casinos emerged, Rakieten — who used to manage the Jackson  Harness Raceway — said he saw an immediate 20 percent decline in wagering at the now-defunct track, which closed in 2008.
“We’re doing poorly. We were hurt more by the casinos than the economy,” said. “Race tracks are in major competition with casinos for gaming dollars.”
Locking said most of its track revenue comes from simulcast betting.
In 2008, simulcast betting accounted for more than $26 million of Sports Creek’s wagering totals, while live races generated $1.6 million.  Each of those figures was down compared to the previous year.
Statewide, simulcast races made $212 million compared to live wagering’s $18 million at the state’s then-seven tracks in 2008.
“We’d much rather have people winning all the time. We get a percentage of every dollar wagered,” Locking said. “That keeps money in Michigan and in people’s pockets.”
© 2009, Capital News Service, Michigan State University School of Journalism. Not to be reproduced without permission.