Long powered by the Big Three automakers, the bankrupt Motor City today is relying on casino cash, the Wall Street Journal reported today. Taxes drawn from Detroit's three casinos have been the subject of months of tense negotiations in the city's municipal bankruptcy case. Detroit pledged the casino revenue as collateral in a 2009 deal with two of the world's biggest banks that was aimed at securing lower interest rates. That bet went sour, contributing to the city's financial woes. Now, two potential settlements with the banks have been rejected by Bankruptcy Judge Steven Rhodes, who is presiding over Detroit’s bankruptcy case, putting the casino revenue at risk. Casinos are considered essential to the city's revitalization plan because cash-poor Detroit draws more wagering-tax revenue from its three gambling halls and attached hotels, opened a decade ago, than from the taxable property value of assembly lines at Ford Motor Co., Chrysler Group LLC and General Motors Co. But like the auto industry before it, local casinos could soon contribute less to the city's coffers as competition heats up from newer casinos within driving distance. Last year, taxable revenue from casinos fell 4.7 percent to $1.35 billion, the biggest year-to-year drop ever, according to the Michigan Gaming Control Board.
