MGM Plans for Springfield Casino: Part 2 in “The Tale of Two New England Casinos”

MGM Springfield

New rendering of MGM Springfield’s Hotel – no tower.

Yesterday, I pointed out Twin River Management’s approach to New England’s casino expansion. I mentioned it was making itself a little bigger fish in the small pond of New England’s gaming.  Now let’s take a look at MGM – a big fish in the same pond that just wants all the other fish to go away because, well they’re MGM – they are the entitled fish.

MGM SpringfieldMGM is taking a different approach, but why?  They have already “dissed” their competition. They consider CT’s third casino proposal nothing to worry about, yet are suing because they would have liked to have a chance for a CT casino.  Note to MGM – you had one at Foxwoods and pulled out. They say they are not afraid of competition in or out of Massachusetts. Then why are they cutting back on their resort casino in Springfield, Massachusetts?

It all started with the 25-story tower – here today, gone tomorrow. The claim of “skyrocketing” costs is a strange reason for such a giant in the industry – controlling the south strip in Las Vegas, high stakes with its presence in Macau, and pursuing another market in Atlanta, Georgia. You’d think they understood the risk and reward of the gaming business.

New Entrance renderings for MGM Springfield

New Entrance renderings for MGM Springfield

And it is the second surprise from MGM in four months, following its June decision to push the $800 million casino’s debut back one year to September 2018 to avoid coinciding with I-91 repairs. At first I thought trust would become an issue, in my post “Can Jim Murren & MGM Resorts Be Trusted in Springfield?”   But I am told that changes in projects such as these occur more often than not, and that’s true.  But so much downsizing without approval from Springfield or the Massachusetts Gaming Commission?

According to Shira Schoenberg in her article from MassLive, Joseph Weinert, executive vice president of Spectrum Gaming Group, a New Jersey-based independent casino research and consulting firm confirms that “A lot of conditions can change….These companies have a fiduciary responsibly to their stakeholders to get their best possible return… that means having to change the plans. In some cases, they’re expanded. In some cases, they’re contracted.”

And contracted, or smaller it will be.  To see the casino’s newest plans for Springfield, click here.

Here are the changes in a nutshell:

  • MGM Springfield is reducing the size of its casino development by 14 percent,  including a significant cut in retail space – the casino block and the retail block, will decrease by a total of 122,534 square feet
  • the retail block will be reduced by 38.1 percent overall
  • a smaller bowling alley
  • less space for its movie theaters
  • No 25-story hotel – The hotel will still have 250 rooms, although the report details the hotel shrinking an additional 25,490 square feet
  • The height of the parking garage will be reduced by one level, a loss of 387 parking spaces.
  • space needed for elevators, storage, exit stairs, elevator shafts and lobbies is now reduced to the hotel change

Let’s look at a larger picture – MGM Resorts International.

Las Vegas South Strip.

Las Vegas South Strip. MGM owns Mirage, Bellagio, Aria, Monte Carlo, New York-New York, MGM Grand, Excalibur, Luxor & Mandalay Bay.

MGM is a giant in the industry.  MGM has been an innovator in helping Las Vegas in rising out of the 2007 recession.  But, looking at its latest news, I have to wonder if their perspective on their part of the gambling industry isn’t changing due to its global business woes and policies.

MGM Macau

MGM Macau

MGM Macau continue to nose-dive, as other casinos there, due to pressure from the Chinese Govt.  MGM has built a new arena on the strip, but refuses to add a parking garage for  those attending events, to Clark County’s dismay.  Speaking of parking, MGM is considering having patrons pay for parking at all its casinos in Las Vegas – something that would change the Vegas experience for Vegas visitors for years to come. Numerous Vegas pod-casters and bloggers (links featured to the right) criticize this, saying they are getting away from the gambling business, considering themselves more of an “entertainment” business.

The bottom line begins to be seen in revenue and visitors to the casino.  In Shannon Young’s article for MassLive “MGM Springfield: Smaller casino project means fewer daily visitors” she mentions that estimates of visitors due to the project changes would decrease.  MGM, however considers them minor.

The proposed changes still need approval by the Massachusetts Gaming Commission and the City of Springfield.

The question is not “does MGM know what it’s doing?  MGM understand the casino businnes as well as anyone.  the real question is “Does the town of Springfield, the MGC, and the residents of Massachusetts know what MGM is doing?



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