In the past, if Connecticut and Massachusetts gamers wanted to gamble, they had to go to Atlantic City, which was several hours away.
Now, after many years of frustration and impatiently waiting, the MGM Springfield casino opened Aug. 24. That means that a luxury casino has opened in New England. And, now, Atlantic City has some serious competition.
Of greatest concern for the surrounding casinos are the ones in Connecticut. Hartford, Conn., and Springfield, Mass., are less than 30 miles away. The MGM Springfield hopes to draw some of its business from the two Native American casinos in Connecticut. The Foxwoods Resort Casino and the Mohegan Sun have not done as well as expected. Their plans for a joint casino have been put on hold because of declining revenue. And, the MGM Springfield has big plans for the area.
MGM Springfield’s Reach
The owners of the MGM Springfield intended it to be a regional destination. It hoped to draw between 5 and 6 million visitors a year, with some as repeat visitors. Most, according to research done by the company, will be repeat visitors within 75 miles of the casino. A third of them would be coming north on Interstate 91.
Part of MGM’s marketing strategy is to bus clients in from Hartford as part of a $20 excursion tour, which will begin September. The service will be available Monday through Friday. In addition, the casino has a giant database of local residents who have visited Las Vegas, especially those who have visited the MGM property. These customers will be offered special previews and discounts for the new casino property. The size and scope of MGM’s investment in the area are staggering, especially along the East Coast. In addition to Las Vegas and Springfield, the casino owns properties in New Jersey, Washington, D.C., and outside New York City.
The cost to construct the MGM casino was approximately $960 million. It has 125,000 square feet of gaming space and includes a spa, concert venues, luxurious hotel rooms, restaurants, and nightspots. The gaming floor includes slot machines, table games, and high-roller tables.
The Problem for Connecticut
Both Foxwoods and the Mohegan Sun contribute mightily to the economy of Connecticut because they get 25 percent of all slot revenue, as well as tax revenue overall. The Connecticut government has been facing declining revenue, from a high of $430 million in 2006-2007 to $274 million last year. This year’s anticipated revenue will be around $200 million from slots, which represents a 60 percent decrease in revenue in 11 years.
MGM now becomes a member of the market in New England that has exploded since the 1990s. In 1990, the entire region of New England had three casinos. However, New England now has eight casinos, including the MGM Springfield. A ninth casino is set to open in Boston within the year. The casinos will be competing in a modest growth market that only grew 2.2 percent in 2017. The overall market in the area is worth approximately $2.7 billion. This amount does not include additional revenue from dining and concerts, which MGM sees as highly important in a competitive market.
MGM also plans to offer online gaming and sports betting in the Springfield area, as part of its efforts to be as competitive as possible. Other casinos in the area have increased their offerings, such as an exposition center and convention center with a lot of space. It appears that in order to stay competitive, casinos in the area of the MGM Springfield will have to step up their game.
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