You know those smiley, gamblers, smoking and non-smoking, rich and poor, young and old, who play black jack and craps and poker and slot machines in Detroit's casinos.
Well, their losses are essential to helping the city operate.
The Detroit News reports that Emergency Manager Kevyn Orr said in a sworn deposition last week that the city needs to access monthly casino tax revenues to finance operations during bankruptcy if it is to stay alive, according to a report in the News by Chad Livengood and Robert Snell.
The News writes:
Orr made an impassioned case for why the city needs to terminate a complicated interest rate swap transaction with two big banks in order to get “urgent access” to $11 million in monthly wagering taxes currently tied up in debt payments.
The emergency manager wants to spend $1.25 billion over 10 years from the proposed settlement to replace equipment and vehicles for first responders and tame a city plagued by one of the highest crime rates in the country.
The Gaming News in July wrote this in a press release:
In 2009, the City pledged a specific revenue stream — payment from the developers of the City's casinos and taxes upon each casino's gross receipts — as collateral to secure the City's obligations on certain hedging agreements. Syncora insured these hedge agreements, which are often called swap agreements. Syncora also insured certain of the $1.4 billion in certificates of participation that were issued to shore up the underfunding in the City's two public employee pension funds in 2005 and 2006.
