Efforts to fight the deadly coronavirus pandemic – from plexiglass signs on roulette tables to bans on guests standing and drinking at the same time – dominated the news for MGM Springfield and the other region’s casinos in 2020.
But it is gambling in sports, and how Massachusetts and its neighbors regulate it, that could have the greatest impact on MGM.
“If they don’t gamble in the casino or online, I don’t see a great future,” said Richard McGowan, a professor at Boston College’s Carroll School of Management who studies the gambling and casino industries. “You are far too heavily in debt. The future of gambling seems to be online. What MGM Springfield will do or break is what Massachusetts law will do with sports games. “
That could be online betting through the existing casinos like New Jersey did. Delaware uses the state’s lottery. But online operators like DraftKings also want to participate.
McGowan is the author of six books on the gambling, alcohol and tobacco industries. He predicts that MGM will sell Springfield Casino to make up for its losses on property that failed to live up to expectations. MGM management says this is not on the table.
“Let’s settle any matter of MGM’s continued commitment to the Springfield community,” the company said in an email. “Since we reopened our doors in July, despite the ongoing pandemic and mandated restrictions, we have been carried by our dedicated customer base and robust business performance. We look forward to the future here in Springfield and to resuming the progress of the many redevelopment projects in progress downtown. “
MGM management declined to be interviewed in person. They responded to an email asked about how sports betting will affect MGM Springfield’s future.
“Sports betting has been a convenience Bay Staters have been asking for since the 1992 US Supreme Court repealed the Professional and Amateur Sports Protection Act in 2018,” the company said.
“Sports betting is already taking place illegally. Legalizing and properly regulating this market will protect consumers, ensure responsible game logs, potentially generate an estimated $ 50 million in direct annual tax revenue for the Commonwealth, and help support the many high-paying Massachusetts jobs that MGM Springfield created . We will continue to work with lawmakers during the new session to bring sports betting and associated revenue to the coffers of Commonwealth citizens. “
MGM Resorts International, the parent company of MGM Springfield, tried last month to buy UK gaming company Entain, owner of Ladbrokes bookmaker and global online gaming infrastructure, for $ 11 billion. Entain declined the offer.
Casinos in the northeast are slowly reopening after pandemic shutdowns last year.
The three Massachusetts casinos – MGM, Encore Boston Harbor, and Plainridge Park – reopened to 24-hour operations in the last week of January after they closed from 9:30 p.m. to 8:00 a.m. due to a strict COVID-19 curfew had to be. The hours of gambling applied at least initially to slots at MGM. According to a press release, the table games were open until 4 a.m. on Fridays and Saturdays.
Business at the state’s three casinos rebounded in December, according to the latest information from the state gambling commission. However, revenues are still well below pre-pandemic levels.
MGM Springfield reported gross sales of $ 11.4 million in December. This corresponds to an increase of around 8.5% compared to the MGM reported in November of 10.5 million USD.
However, in December 2019, MGM reported gross gaming revenue of $ 19 million. In December 2018, $ 21.6 million was reported.
For Encore, the Gaming Commission reported gross gaming revenue of $ 29.3 million, up roughly 7% from $ 27.3 million in November.
At Plainridge, gross gaming machine sales were $ 9.2 million in December, up approximately 20% from $ 7.6 million in November. Plainridge does not have any table games.
The two Connecticut casinos reported significant revenue declines in 2020.
Mohegan Sun in Uncasville reported net sales of $ 715.67 million – a decrease of nearly 28% from fiscal year 2019 when it posted sales of $ 992 million, according to casino.org. Foxwoods of Mashantucket said net sales were $ 539.2 million, a 31.6% decrease from the prior-year figure of $ 787.8 million.
Foxwoods and Mohegan Sun abandoned plans in December to build a competitor for MGM on the site of a now-demolished movie theater in East Windsor, south of the Massachusetts state line. Connecticut casinos have also stepped in to help their neighbors get tested for COVID-19 and have room for mass vaccinations.
MGM is clearly focused on reopening.
“We’re excited to welcome some team members back today. As the capacity constraint is relaxed and additional amenities like the Hotel and Tap reopen, we hope to see even more back,” said Chris Kelley, President of MGM Resorts International The Northeast Group , which includes Springfield and the company’s New York state operations, announced in a pre-reopening statement on Jan. 29.
MGM didn’t say how many employees it wanted to bring back. Before the pandemic closed in March last year, MGM Springfield employed 2,000 people. It reopened in July with 800 employees working under capacity constraints and some amenities such as the hotel and cinema remaining closed.
In November, immediately after the curfew was imposed, MGM announced that layoffs or cuts would affect 250 employees.
MGM has reopened its Chandler Steakhouse and South End Market Food Court. Unlike Encore, MGM has not reopened its spa.
“We hope that the promise of a widely available vaccine and continued focus on safety practices will ease restrictions, strengthen the economy and pick up consumer demand again so we can keep the facilities open,” MGM said in an email response Ask.
A Wahlburg restaurant was completed on the MGM campus last year, but the opening has been postponed until at least spring.
The city admitted last year that MGM Springfield is not yet having the desired effect on economic growth in its neighborhood. Nearby is a CVS, which opened in 2019, and a jewelry store across the street. The city is trying to change the zones in the neighborhood to encourage development.
“I think it’s important to realize that despite the impact of the pandemic on MGM, MGM has been talking at the table about long-term plans related to where the city is going in terms of downtown economic development and how it plays a role can play a role in this effort, ”says city development manager Timothy Sheehan.
Without MGM as a partner, the renovation of 31 Elm St. on Court Square would not have progressed, according to Sheehan. “You stepped on the plate at a very, very difficult time and said, ‘We’re in’ and signed the end of the contract,” he says.
The partnership includes US $ 5 million from MassMutual, US $ 14.5 million from MassHousings Workforce Housing Initiative and US $ 16 million from MGM, all of which is structured as a loan. Developers Opal Real Estate Group and WinnDevelopment have also received approximately $ 11.3 million in historical tax credits. They will use the loans along with developer capital, a conventional mortgage, and a union commitment to help with $ 500,000 in housing funds to round out the total of $ 51.3 million in funding required.
MGM will return the property at 195 State St. to the city for additional redevelopment. Once the office of Springfield Public Schools, this building has been the subject of frozen redevelopment plans for more than a decade. Like the Court Square project, it was supposed to be a place with affordable downtown housing for casino workers, something MGM promised in its pre-development talk for the city but has not yet delivered.