Gambling in American History

In November 1996, Michigan voters passed Proposition E, which allows Detroit to develop three unlimited stakes, Las Vegas–type casinos. Although the victory for casino proponents was relatively narrow (51.8 % to 48.2 %), it was unexpected in most quarters. In the 1996 elections, voters in Ohio and Arkansas turned down casino proposals by wide margins. Detroit voters had rejected casinos in advisory votes in 1976, 1981, 1988, and 1993 before voting yes in advisory votes in 1994 and 1995. The Michigan vote was the first statewide victory for unlimited casino gambling since the 1976 New Jersey vote.  Detroit has become the largest city in the Western Hemisphere with casinos located within its boundaries.
Michigan passed supplemental legislation to enable the licensing process to begin. The process involved recommendation from the city government and final action by a new state casino gaming commission. Proposition E actually designated two of the companies that would receive licensing. It was stipulated that preference had to be given for two licenses to organizations that had sponsored the successful Detroit advisory vote in favor of casinos in 1995. Those two companies were Greektown and Atwater groups. The Greektown Group of investors took on as partners a Chippewa Native American tribe that runs several casinos in Michigan’s Upper Peninsula. The Atwater Group teamed with the Circus Circus (now Mandalay Resort) Company for its proposals. These two winning proposals joined a successful proposal for the MGM Grand Company of Las Vegas. As a part of the licensing, the casinos won the right to have temporary facilities. The first temporary facility was opened by the MGM in the summer of 1999, and the other two followed in the fall.
In addition to many fees, the casinos must pay a tax of 18 percent of their gambling winnings. Of this amount, 55 percent goes to the city of Detroit and 45 percent goes to the state government’s public education fund. Originally it was estimated that the casinos would have revenues approaching $1.5 billion a year. In the first year, two casinos had more than $700 million each.
The voters in Michigan were not strangers to casino gambling and other forms of gambling. In fact, the election victory on Proposition E could be credited to the existence of the Windsor, Ontario, casinos. The first Windsor casino had opened in 1994. A second riverboat casino opened two years later. Approximately 80 percent of the business in the casino came from the United States, and most of those gamblers were from the Detroit region. It was claimed that the Detroit economy was losing around $1 million dollars a day as Detroiters crossed over the Ambassador Bridge and through the Detroit-Windsor tunnel.
The state had its own casinos, which were operated by Native American tribes under agreements made in 1993. A state lottery was established in 1972 after voters removed a ban on this form of gambling. The removal of the ban also enabled the establishment of casino gambling for the Native Americans, as did a 1975 law that authorized charitable gambling, including charitable casino gambling. Pari-mutuel horse-race betting began in the state in 1933 in an effort to garner public revenues amid the Depression economy.
The billion-dollar Native American casino industry of Michigan is anchored by the Soaring Eagle Casino in Mt.  Pleasant on the lands of the Saginaw-Chippewa tribe. The casino is the second largest Native casino in the country, having a gaming floor of 150,000 square feet, over a hundred tables, and 4,000 slot machines. Other large casinos are located in Pshawbetown near Traverse City, in Sault St. Marie, and in Baraga near Marquette. Fourteen other casinos are scattered across the state in Brimley, Watersmeet, Wilson, Petoskey, Athens, Manistique, Manistee, St. Ignace, and New Buffalo. The Native casinos had agreed to pay the state 10 percent of their machine revenues (with 2% going to local governments) as long as there was no other machine gaming in the state. After Detroit casinos were licensed, the state dropped its 8 percent share of the tax, but the tribes agreed to continue the 2 percent tax to the local governments. <