MGM Resorts’s community outreach program included maintaining a venerable local church and restoring the state armory.
MGM Springfield opened on August 24 to good reviews and capacity crowds. Reports from local and national sources indicated that public support for the new casino is widespread and geniune. MGM Resorts sought a community approach to their integrated casino and it appears to have been a success. Springfield residents are proud of their casino, which is a part of a community rejuvenation project.
Meanwhile, MGM Resorts twisted the knife a bit with a banner at Bradley International Airport in Hartford.
The banner at the Connecticut airport asked whether travelers would rather go to a resort in the middle of a city or “in the middle of nowhere“.
The question clearly was a dig at Mohegan Sun and Foxwoods Casino, the only two land-based casinos in the state of Connecticut.
The two tribes which own those casinos, the Mohegan Tribe and Mashantucket Pequot Tribe, have tried to counter the MGM Springfield as soon a billion-dollar casino was announced for Western Massachusetts.
MGM Springfield: A New Threat
It is understandable, because the MGM Springfield poses a direct threat to business for the tribal casinos. Located in forested areas in the southeastern part of Connecticut, the two casinos are far away from population centers. Once a draw for casino goers from New York City and Boston, the allure of Mohegan Sun and Foxwoods seems to have faded in the era of market fragmentation.
The two tribes won the right to build a satellite casino in East Windsor, a suburb of Hartford, to counter the effect of MGM Springfield. The idea was to build a firewall between Hartford-area gamblers and MGM Springfield, which is only 25 miles down the road. If the Mashantucket Pequot and Mohegan tribes built a Hartford casino, Connecticut gamblers would not travel across the border to enjoy gaming in Springfield.
East Windsor Casino Licensing Issues
Unfortunately for the tribes, Ryan Zinke runs the US Department of the Interior, which oversees the Indian Affairs Bureau. The tribes need Zinke’s approval for the new satellite casino. For the better part of a year, Zinke’s department has not denied the application, but it has simply refused to give an answer. Meanwhile, it is known that MGM Resorts’ lobbyists have met with Zinke.
Making matters worse is the fact Encore Boston Harbor, Wynn Resorts’ entry into New England gaming, opens in June 2019 to even more fanfare than MGM Springfield. While the Springfield casino cost a mere $960 million to build, Encore Boston Harbor cost $2.4 billion. When it opens, most traffic from Boston to the Connecticut tribal casinos should stop flowing.
Ray Pineault on Competition
Ray Pineault, Mohegan Sun’s president and general manager, recently addressed the situation. Pineault said, “We’ve been preparing for this for years. We understand the MGMs and Wynns are coming to Massachusetts and they’re looking to get into this New England market because it’s been such a successful market.”
Mohegan Sun’s president said his casino has been dealing with competition from New York state casinos. Resorts World Catskills, which opened in February 2018 in Monticello, has 2150 slots machines and 150 table games. Resorts World New York City has a 5000-gaming machine slot parlor in Queens, at the Aqueduct Race Track.
Pineault listed off the other sources of competition: “New Jersey has always been very competitive for us, and obviously Pennsylvania opened up with all their casinos.”
Market Saturation a Problem for Everyone
Of course, Mohegan Sun has grown used to competition. Ray Pineault encapsulated the problem for Mohegan Sun and its many competitors. In the early 1990s, Atlantic City had the only other casino east of the Mississippi River. Now, states across the eastern seaboard have a combination of casinos, racinos, and integrated casino-resorts.
The market is saturated. Competition is local. Massachusetts, New York, and Rhode Island all have casinos. Beyond that, Pennsylvania and New Jersey have casinos. Every major population center has multiple options for gaming, so two casinos “in the middle of nowhere” are likely to have problems drawing customers.
Connecticut Casino Face Trouble
Both Connecticut casinos are thought to be more than $2 billion apiece in debt. Mohegan Sun began a multi-billion dollar renovation and expansion in 2007, the year before the real estate market crashed and the 2008-09 Global Recession happened. It was the absolute worst time to finance a major expansion, because Americans had less disposable income to spend.
The past decade has been a serious of hammer blows against Mohegan Sun and Foxwoods. The two casinos have tried to make expand operations with some success. Mohegan Sun has operations in Pennsylvania and New York, while it manages Resorts Casino in Atlantic City. Mohegan Sun even manages a casino in Washington state.
Back closer to home, things are not so rosy. MGM Springfield looks as if it is building a community-rooted business, something which should be popular for years to come. MGM Resorts’ marketing and community outreach plan has been brilliant to this point.
Union Gaming on MGM Springfield
John DeCree of Union Gaming, a Las Vegas gambling industry research and analysis group, researched the MGM Springfield and brought back sparkling reviews to investors. DeCree said in late August, “We spent several days in Springfield ahead of the opening, touring the new facility and getting a sense for local expectations.”
The Union Gaming analyst continued, “Two things were apparent. First, local residents are truly proud of the development; and second, MGM’s design and development team just gave the company a big boost in the race for licenses in new jurisdictions like Japan. The meticulous attention to detail, unique integration of local history, and success in restoring key historical landmarks like the 130-year old First Spiritualist Church and 123-year old State Armory, won’t go unnoticed by new jurisdictions considering MGM for new gaming and (integrated resorts) licenses.”
MGM Resorts quickly has become a part of the local community. Word of mouth will spread and make it hard for the competition, which (by law) is closed off on its reservation casinos. Thus, the jibe that travelers wouldn’t want to visit a casino in the middle of nowhere has a special bite.
