The three Detroit casinos met recently with 230 potential Michigan suppliers in an effort to spur economic and job growth in the state. ©Thinkstock.com
It’s a good bet there are a lot of new business opportunities for Michigan companies interested in supplying the state’s casino industry.
The three Detroit casinos, for example, had adjusted gross receipts of more than $469 million — just from Jan. 1 through April.
A Grand Rapids company that was invited by Pure Michigan Business Connect to meet recently with Detroit casino purchasing reps is already getting a return on it.
Greektown Casino-Hotel, MGM Grand Detroit and MotorCity Casino Hotel, in conjunction with Pure Michigan Business Connect and the Michigan Gaming Control Board, held the first “matchmaking summit” specific to the gaming industry in Michigan about a month ago.
The invitation-only event held at Ford Field in Detroit brought more than 230 potential Michigan suppliers together to connect with buying teams from the three casinos in an effort to spur economic and job growth in the state.
“The Pure Michigan Gaming Summit is a groundbreaking effort to educate Michigan companies on the unique opportunities with the Detroit casinos and how they can get involved in this multi-million dollar industry,” said Steve Arwood, Michigan Economic Development Corp. CEO. “We commend the casinos for their commitment to working with Michigan suppliers and growing our economy.”
Hosted by Pure Michigan Business Connect, part of the MEDC, and the Detroit Regional Chamber, the Gaming Summit linked Michigan companies with casino buyers committed to finding and working with qualified Michigan suppliers.
What the casinos need ranges from the obvious — slot machines, surveillance hardware and software — to the not-so-obvious: graffiti film for elevators. Just about everything else required by a major hotel and restaurant is also on the purchasing/contracting list, from food, beverages and stools to window washing and fuel for the casino’s security vehicles. There was also significant interest in infrastructure improvements, according to Trevor Pawl, managing director of Pure Michigan Business Connect.
He said he had been advised by representatives of the three Detroit casinos that they spend about $165 million a year on goods and services — and about 30 percent of that goes to companies based outside of Michigan.
But there is a catch for would-be casino suppliers: “You have to have a license (from the state) to work with the Detroit casinos, so we viewed this event as half education and half opportunity,” said Pawl.
More than 250 companies from throughout Michigan attended the Gaming Summit, where the Michigan Gaming Control Board gave an in-depth presentation on how to become licensed.
At the summit, according to Pawl, “there was a lot of need for service providers — in particular, marketing and promotion.”
Creative Studio Promotions in downtown Grand Rapids sent two of its account executives to the summit: Mary Szumski and Kristina Bolthouse.
Szumski noted they had to apply in advance to attend. The three casinos were the ultimate deciders of which suppliers would attend. “They told us at the casino summit that there were 300 companies” that had applied but not been accepted, she said.
Creative Studio Promotions supplies branded merchandise, such as sweatshirts bearing the logo of Gun Lake Casino.
“We come up with the creative ideas for the product (the client) is going to give away,” said Menda Wright, who owns Creative Studio along with Ann Vidro. Creative Studio is a certified Women’s Business Enterprise.
Wright said they make sure the promotional merchandise they supply coincides with clients’ corporate messages “so it’s not just throwing pens and mugs” at customers and potential customers.
Creative Studio Promotions was founded in 2012 and now employs nine people. Last year it booked $2 million in sales and is the supplier of promotional merchandise bearing the logos of Spectrum Health and Priority Health, among others.
Wright said her firm has a niche: It creates “e-stores” for its client companies, which allows them to order more branded give-away merchandise online for immediate shipment.
According to Szumski, MotorCity Casino has three primary vendors for promotional merchandise, all of which serve as “idea vendors,” as well. Another 10 companies are approved to bid on orders for promotional merchandise.
Creative Studio is one of the three primary vendors, said Szumski. “We landed that position as a result of the summit,” she added.
One product they demonstrated at their one-on-one meetings with casino purchasing reps in Detroit are 1-inch square stainless steel “ice cubes” with an engraved logo.
Szumski said their actual business with the casinos is still to come because of the licensing requirement. Creative Studio has applied to the state for its casino vendor license — which entails a fee of about $1,000 — but there are also background checks to be done. Casinos are highly regulated by state governments to try to ensure complete honesty in all operations because of the large volumes of cash flowing through them and the large numbers of people making those bets.
Creative Studio only had appointments with two of the three Detroit casinos going into the Gaming Summit; it was unable to get an appointment with the MGM Grand Casino.
“So we went and found ’em,” said Szumski. “We stood right at the table and did our presentation for them,” she added. “We’re quoting items for all three casinos at this point.”
In terms of revenue, the three Detroit casinos almost equal the total of the 23 casino facilities operated by a dozen Native American tribes in Michigan. The tribal casinos, however, were not part of the Gaming Summit.
“That’s our next step,” said Pawl, noting that the first summit was a beta test.
Steve Zanella, president/CEO of MGM Grand Detroit, noted it opened more than 15 years ago.
“Since that time, we have spent over $1 billion with Detroit, Michigan, woman-owned and minority-owned vendors. This summit will assist in continuing that commitment to the city of Detroit and the state of Michigan. Not only is this an opportunity to supply the MGM Grand Detroit, it also opens the door of opportunity with the entire MGM Resorts International organization. ”
MotorCity Casino CEO Gregg Solomon said his business has done more than $1.1 billion in business with targeted companies since 1999.
“We're always looking for opportunities to expand our list of qualified Michigan vendors to deliver the best experience to our patrons while also bringing positive economic impact to the state,” said Solomon.