MGM Sale Rumors Not Surprising
Editorial
When the report surfaced on March 21 that MGM Resorts International is exploring the sale of its casino operations at MGM Springfield and Ohio’s Northfield Park, it should not have come as a shock to anyone.
Indeed, rumors about MGM shedding the Springfield property from its portfolio of casino holding have been floating around since … well, since the facility opened its doors in August 2018.
And they have persisted, primarily because the casino has, to put it mildly, underperformed, at least when it comes to the expectations MGM had when it decided Springfield would be a good entry point for the Massachusetts market.
MGM projected that a Springfield casino could reap $34 million in revenues a month. The reality is, it hasn’t come close to that number, with $26 million the first month it opened being the actual high-water mark.
The casino has had to endure a pandemic and increased competition from several points on the compass — and there was already formidable competition not far away in the form of well-established Connecticut casino complexes.
But from day one, when the long lines that were expected to form outside MGM to check out the shining new attraction failed to materialize, it was clear that this facility was not going to perform as hoped, and it was going to become a drain on the parent company, which invested $1 billion in its creation.
That became clear when Bill Horbuckle, MGM CEO, told reporters after meeting local officials last year, “our original valuation of this market simply was off — full stop.”
So what now?
Talks of a sale are in the preliminary stages, and nothing may come of this. If MGM is intent on selling the property, we hope it will be to a responsible party, and maybe even a local party, that can somehow change the trajectory of the property and at least continue to make it a key contributor to the local economy.
From the start, we have said that MGM Springfield was not going to magically change the landscape and transform the Western Mass. economy. But it would be an important addition to the mix and would bring people to the region.
It has done that, to some extent, but it simply hasn’t performed as MGM Resorts expected it would and needs it to.
“The news of MGM exploring the sale of MGM Springfield is both surprising, as they’ve become a fixture in our community, and unsurprising, as the rumors of their fickleness to the site started even before a shovel was in the ground,” state Sen. Adam Gomez said. Other local elected officials have even stated they won’t be sad if and when MGM leaves town.
Not knowing who or what might come next, we won’t go that far.
But we will say that Springfield and this region could certainly do much worse than what MGM has brought to the 413 — and that anything worse would be a serious setback to the South End, Springfield, and the area’s economy.
Almost from the day the casino opened, people have been asking, “what will happen if MGM sells the property?” We may soon be finding out.
