First In-State: New MGM Casino to be Built in Massachusetts

casino-openingThe Massachusetts Gaming Commission has finally awarded the first casino construction license, giving it to the city of Springfield. MGM has been awarded the license and pledged to create approximately 2600 new construction jobs and 2350 full-time jobs that will benefit the local economy. Their website is already live at mgmspringfield.com. Springfield is one of the state’s most difficult economies to break with high unemployment and lower than average annual income.

One interesting aspect of the MGM project is that it plans to preserve historic buildings in the downtown area of Springfield and add local, non-casino related entertainment such as a bowling alley and movie theater to the area as well. This appears to be an ambitious and broad scaled approach by MGM to gain and maintain an early foothold in the infancy stages of Massachusetts’ casino operations. Some may consider this approach to be a gamble, but MGM is large enough to take on the risk.

However, there are details of the project that may be more optimistic than realistic. One of these details is that the casino hopes to draw players from the New York and Connecticut markets, specifically to compete with Connecticut’s Mohegan Sun and Foxwoods casinos by offering players new accommodations at discounted prices in a new gaming environment. Adding players from Foxwoods (Mass.) is a good strategy given their current woes and shaky financial future, but the other choices are somewhat questionable.

New York has one of the best run state casino operations in the geographical area, and while Mohegan Sun may be well-worn, in the long-term it will likely be the preferred choice for players in its own state. After its opening, MGM will get the predictable initial run of players who are interested in looking at the new kid on the block, but consistently gaining players from New York or elsewhere seems a bit too optimistic.

A more obvious problem with the MGM plan is that the state supreme court has yet to rule on whether or not a statewide referendum should be held in November of this year, to once again accept the building of gambling sites in Massachusetts. MGM said it is going to move forward with the planning and construction without waiting for the ruling or, perhaps, the referendum.

Again, MGM is taking a risk with this decision, but unlike many of its competitors, it can afford to accept it. As evidence of MGM’s large position in the gaming industry, it reported that it had more than $2.6 billion in revenue from its domestic based gambling operations.

Despite the potentially unfounded optimism, the early acceptance of the unusual MGM plan may be a surprisingly financially beneficial move by the state. They offer a long-term commitment and strategy as the first recipient of a Massachusetts casino license, and brings national and international brand name recognition with its operations, basically said, they have deep pockets. The same kind of notoriety cannot be said of any of the other applicants.

From a political view, residents and some politicians may both change their attitudes about casino construction even if the referendum should appear on the ballot in November. An MGM hotel and resort in the middle of the state may draw tourists, or at least weary travelers regardless of the existence of the casino, but that is certainly not why there are there. Perhaps this is the unspoken part of the deal, or perhaps they know something we don’t. Either way is seems that gaming is Mass. is off to a strong start.

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Jared Bates

I have been working in, and with different casinos for over twenty years, and as such I have seen many things happen to gambling online and offline. From Vegas to Atlantic City, and small places in between, my passion lies with games where I can win money.

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