Local Officials Skeptical About MGM’s Commitment to Springfield

MGM Resorts International is exploring selling off its MGM Springfield casino in Massachusetts, according to a report published Wednesday by Bloomberg.

The report, which was based on information ascribed to “people with knowledge of the matter,” said that MGM was considering the sale of Northfield Park in Ohio as well.

MGM Springfield Revenues Fail to Meet Expectations

According to the report, MGM is looking at unloading what it sees as underperforming properties as management continues to be frustrated by the company’s stock price. While MGM has increased both revenues and profits, its stock has climbed by less than 5% over the past two years. That stock is currently trading at $44.90 as of Thursday afternoon.

MGM responded to the report with a statement released on Wednesday night.

“MGM Resorts International is proud of our partnership with the City of Springfield, a partnership that began long before the opening of MGM Springfield in 2018,” the statement read. “We are equally proud of the strength of our operations at MGM Springfield, which achieved among its highest revenue numbers in February. We are aware of the recent press reports and have a longstanding policy not to comment on any rumors.”

Despite how the statement reads, other statements have suggested that MGM vastly overestimated the size of the market for the Springfield casino.

“Our original valuation of this market simply was off, full stop,” MGM Resorts International CEO and President William Hornbuckle told reporters in January 2023. “We thought there would be more business here than ultimately materialized. Scale, score, etcetera. It is what it is.”

Initially, MGM told state regulators that it expected to average $34.8 million in gross gaming revenue per month at its Springfield casino. 

The facility never hit that target in a single month, reaching a high of $26 million in September 2018, its first full month after opening. As the company said, February 2024 was a relatively good month for MGM Springfield, as the casino generated $22.9 million in revenue.

Local Officials Skeptical About MGM’s Commitment to Springfield

Residents reacted to the sale with concerns over what the future would look like for the casino under a new owner.

“I think it could be a bad thing unless the mayor and the state hold the new company to the commitments that MGM made, as far as social help and giving enough money to make it worthwhile for the city and the people around here,” West Springfield resident Susan Gorman told local television station 22News.

This isn’t the first time that speculation has surfaced that MGM might sell the Springfield casino. In 2019, rumors surfaced that the company might look to sell its Springfield location to take over Encore Boston Harbor, as it appeared that Wynn Resorts might be forced to leave the Massachusetts market. 

Since state law doesn’t allow a single owner to own multiple casinos, MGM would have needed to sell its Springfield location to purchase the Boston location.

While that never came to be, many local officials remained skeptical that MGM was ever in Springfield for the long haul, especially after the revenues they had hoped for never surfaced.

“It’s evident to me that since day one, MGM has not been fully committed to this project,” State Rep. Angelo J. Puppolo Jr. (D-Springfield) told reporters. “Look no further than the change in the high-rise hotel and shortened gaming space, along with a short selection of restaurants and entertainment. It’s clear that this was a placeholder for them.”

MGM Northfield Park – the other property noted in the Bloomberg report – is a horse track and casino that is located about 20 miles outside of Cleveland. MGM has owned the property since 2019, when it took over the racino from Hard Rock.