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MGM Springfield Silencing Critics With Early Success, High Numbers

MGM Springfield has only been open for a few weeks, but it appears to be a big success already.

In fact, this week, the Massachusetts Gaming Commission released gross gaming revenue (GGR) figures for August 2018 showing the state’s second commercial casino operation earned approximately 61 percent of what the first did, even though it was only open for eight days in the month.

MGM Springfield posted $9.45 million in GGR from its opening on Aug. 24 through Aug. 31. Approximately $2.1 million came from table games and another $7.3 million from slots.

However, Plainridge Park Casino has been open since 2015 and posted $15.38 million in August GGR. Plainridge Park Casino is a slots-only facility.

The benefit of taxes

The numbers are certainly making gaming regulators and Beacon Hill lawmakers happy. MGM Springfield paid $2.3 million in taxes over the eight days it was open in August. If things continue on this pace, it’ll be putting an average of close to $9 million into state coffers every month.

Plainridge Park Casino paid $7.5 million in gaming taxes last month.

However, there is a big difference between the two. Plainridge Park Casino pays a 49 percent tax on GGR as a Category 2 slots facility. MGM Springfield pays a 25 percent tax on GGR as a Category 1 resort-casino.

Do the math and it shows that if MGM Springfield pays about the same in taxes that Plainridge Park Casino does, it’s doing twice the business.

MGM Springfield business is booming

According to MGM Springfield officials, business has been booming right from the word “go“.

In fact, MGM Springfield President Michael Mathis issued a press release claiming more than 150,000 people visited the $960 million casino-resort in its first three days of operation:

“MGM Springfield had a tremendously successful opening weekend, exceeding our expectations by hosting more than 150,000 visitors in just our first three days. Guests were excited and eager to experience our new resort and be part of our debut weekend. Our hotel and restaurants were fully booked with guests eager to be a part of our historic opening.”

Going forward, MGM expects an average of 15,000 visitors a day.

The Boston Globe reported the early gaming revenue numbers put MGM Springfield on pace to post $430 million in GGR in year one. However, it also pointed out MGM predictions have the property pulling in $500 million annually by its third year open.

University of Texas Rio Grande Valley casino expert Clyde Barrow told the Globe the numbers put MGM right on target.

Higher expectations for the Springfield casino

However, Lasell College political science professor Paul DeBole said he expected bigger opening week numbers. This is particularly considering all the media attention surrounding the property.

After extrapolating the figures, DeBole suggested average daily revenue per slot machine numbers at MGM Springfield look to be about the same as Plainridge Park. Again, particularly during the fanfare of opening week, DeBole expected higher figures, making it questionable what the future holds.

Lining MGM’s pockets and filling state coffers is only part of what MGM Springfield is expected to do. It is expected to turn around the fortunes of Downtown Springfield and other businesses there by drawing renewed traffic to the area.

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A good neighbor?

However, at least one group of Downtown Springfield business is saying the opening of the casino has only hurt it so far.

Three Downtown Springfield strip clubs claim business is spiraling downward since MGM opened. Now, they are asking the city to change a bylaw that allows the strip clubs to stay open until 2 a.m., but not allow anyone to enter or re-enter after 1 a.m.

They claim allowing patrons to enter or re-enter later will help offset the late-night business they are losing. MGM Springfield can serve alcohol to gamblers until 4 a.m. and is open 24 hours.

The city’s initial response is that it wants to avoid turning the Downtown Springfield entertainment district into the “wild, wild west” it was years ago. However, it appears the city will consider such requests on a case-by-case basis going forward.

Underage gambling concerns

In the meantime, MGM Springfield is busy balancing its appeal as a family resort with concerns about underage gambling.

Mathis admitted to the Gaming Commission that underage gambling has been an issue in the early days. However, he also said the property has already implemented changes to prevent it.

The changes include adding signs on the property, plus letting visitors know the policies on minors through social media.

Gaming Commission Chairman Steven Crosby had an admission of his own. He said the problem is due in part due to the commission’s directive that MGM Springfield include non-gaming options. These include the bowling alley, movie theater and arcade.

The property does not allow minors on the gaming floor. No one under 16 is permitted in the facility without an adult. There’s also a curfew requiring minors not staying at the hotel to leave by midnight. However, preventing underage gambling has been a challenge so far. In part because MGM needs to better educate its patrons.

MGM Springfield General Manager Alex Dixon said families are welcome, but for people coming to primarily patronize the casino, it’s best to leave minors at home.

Martin Derbyshire

About

Martin Derbyshire has more than ten years experience in the world of poker and gambling. He contributes to a number of publications dealing with the US regulated online gambling market. He has traveled the globe working as an editor, producer, and writer as well as interviewing major players in the gaming world.