Casinos, racetracks betting on the future

November 23, 2009
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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 casinos 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.

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.

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 to grab 41 percent of Detroit’s $1.3 billlion annual casino sector.

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.

Meanwhile, horse racing is stumbling.

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 Horsemen's Association, said many of the state’s jockeys head to tracks in Ohio, Indiana, New Jersey, Virginia and Canada.

“We’re doing poorly. We were hurt more by the casinos than the economy,” Rakieten 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.

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