What Does Detroit Bankruptcy Filing Mean For Caesars Windsor

At the end of last week, a municipal bankruptcy filing was announced that could impose drastic consequences on various industries.  While Detroit will struggle to pay down its debts and support its crumbling infrastructure, the implications of bankruptcy could cross the border into Canada, posing a significant risk for Caesars Windsor casino.

As one of Canada’s border casinos, Caesars Windsor relies on traffic from the US to maintain growth and remain competitive within the industry.  Much of the border traffic originates from Detroit and its surrounding regions, where access to Windsor is relatively simple.

The casino was first built in 1998 and rebranded as Caesars in 2008, which included a special performance from Billy Joel to commemorate the reopening.  Gambling pundits credit the Canadian border casino for fast-tracking the legalization of casino gambling in Detroit.  Over the years, the American sister city authorized building three casinos in direct competition with Caesars Windsor to provide US gamblers with reasons not to cross the border.

Caesars Windsor launched the first Canadian sports book in 2006 to recapture some of the lost traffic from the US.  Sportsbetting is considered illegal in most US jurisdictions, including Michigan, which gave the Canadian casino an edge over its cross-border competitors.

However, the sports book was less successful than the casino initially hoped.  The border resort attracted an average of six million people annually throughout the 1990s, but has struggled to retain loyal customers over the last decade.  Tighter border security since 9/11, as well as a strong Canadian dollar that remained at or above par with the US dollar, reduced the attraction of gambling in Canada for Detroit players.  Caesars Windsor also faces stiff competition from other Canadian casinos in attracting players on this side of the border.

The news that Detroit intends to file for bankruptcy deals another significant blow to Caesars Windsor.  Detroit’s population is dwindling year over year as people choose to relocate to other vibrant communities.  Bankruptcy protection is expected to drive more residents out of the community, which will further eliminate a customer base for Caesars Windsor.

Ontario is implementing a gambling expansion strategy to build more casinos across the province.  The new casinos will further saturate the Canadian gambling market, leaving Caesars Windsor struggling to retain customers on both sides of the border.

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