As MGM Resorts International looks toward its future, the company is considering selling off some underperforming casinos. One of those casinos is the MGM Springfield in Massachusetts.
Nothing is official yet, and no potential buyers have been made public. But MGM’s investigations alone reveal a wavering faith in its ability to thrive in the Massachusetts casino market. Despite the uncertainty, some Springfield officials are hoping MGM will stay.
MGM Springfield might be sacrificed for further online casino expansion
Bloomberg News initially reported MGM’s sale considerations on March 20, citing unidentified sources who have knowledge of the situation. This news does not mean a sale is certain, but usually where there is smoke, there is also fire.
As MGM looks to shift its focus more heavily to online casino expansion, its financial experts are taking a closer look at its records. While these discussions led to the idea of selling off two casinos, they are still ongoing and might not lead to a sale.
What MGM is worried about is its share price, which has not seen a boost of 5% or more in the last two years despite improved profits and sales. To solve that problem — and to prepare for legal online casino expansion in Massachusetts and beyond — MGM is considering the sale of two casinos. One is the Northfield Park racino in Ohio and the second is the MGM Springfield.
MGM Springfield continues performing below expectations
The reason for MGM Springfield being on that short list is simple. The casino is not performing up to expectations. MGM Chief Executive Officer Bill Hornbuckle said as much during a press conference last year in Springfield.
“Our original valuation of this market simply was off — full stop. We thought there would be more business here than ultimately materialized — scale, scope, etc. And so, it is what it is. And so we’re pushing forward. We’re trying to make the very best of it.”
MGM Springfield launched back in 2018, but it was late to the legal casino party. It opened its doors and took its first wager seven years after the state legalized casino gambling. Fast forward to 2023, and the casino generated just $278 million in gambling revenue. Things have not improved in 2024 either. MGM Springfield accumulated just $20.7 million in January casino revenue — about one-third as much revenue as Encore Boston Harbor, the top casino in the state.
While MGM claims the casino market was much smaller than expected, there are a handful of other reasons for the lackluster performance. During the construction, MGM cut out some plans that would have made the casino a bigger draw. That left a bad taste in the mouths of Springfield officials.
Still, many council members would like to MGM remain in Springfield and give profits a chance to bounce back.
Some officials want more effort put into MGM Springfield casino before sale
There are quite a few different feelings about the possible sale of MGM Springfield among city officials. Those emotions range from hopeful MGM will stay to frustrated that it did not try harder to make a larger impact.
Some officials, such as City Counselor Victor Davila, are hoping MGM will not cash out despite the rumor of a sale.
“I will urge the powers that be at MGM to take a closer look and to give us some time to see if they’re able to fully-rebound, because you know, COVID has just kind of ended and we need to give it time for numbers to come back.”
Others, such as Councilor Malo Brown, are not enthused that MGM has fallen short of its obligations. One such example Brown pointed out was MGM scrapping the 25-story hotel tower which was originally in its plans in 2016.
“You look at MGM right now, it’s not even impressive to me. Like, you can literally drive right by it. We were supposed to have a tower – it was supposed to just bring people in.”
Massachusetts prepared to welcome new casino partner, if necessary
Others fall between both perspectives. Springfield State Representative Orlando Ramos appreciates what MGM has done for the area but admits that the process has had issues from the very start. Those issues include the hotel tower that got nixed.
“That was very problematic to me, from the very beginning. So, you know, it depends what perspective you’re looking at it from – I think that they’ve done some good things for the city, but I also believe that they haven’t done what they could to meet their promises to the city.”
The process of a sale could be a long one, since the Massachusetts Gaming Commission must first approve any dealings. In the event of a sale, the incoming operator would be beholden to the same requirements as MGM. City Council Vice President Melvin Edwards confirmed those details during a recent WAMC Northeast Public Radio broadcast, saying:
“If they are anticipating, or in negotiations for a possible sale, whoever’s buying it will come in with the same conditions.”
State Rep. Bud Williams of Springfield hopes MGM will stay. But if there is a new operator, Williams said there will be expectations of any new city partner:
“I hope it’s not true, but if it is, we have to make sure we get a good operator that’s going to focus on this facility and be a real corporate partner in the city of Springfield.”
