The MGM lion logo roared from its perch on the Green Monster. The Foxwoods sign had been bumped after five seasons by this interloper from Las Vegas.
When Foxwoods originally inked its Fenway deal in 2014, the contract was scheduled to expire after the 2018 season. But Scott Butera, then the Foxwoods president, told me at the time that he hoped the Connecticut casino’s logo would remain on the Green Monster for much longer. (Ironically, Butera now works for MGM, overseeing its interactive gaming division.) So much for that idea.
You can’t blame MGM Resorts for paying up for this prime real estate. The company just invested some $950 million to plant its flag in Springfield, about 90 miles away. With gaming revenues well below early projections during the casino’s first six months, MGM executives need to court the Greater Boston market. Perhaps now more than ever: The massive Wynn Resorts casino is poised to open just over the Boston city line.
That courtship began long before this baseball season. A year ago, MGM sponsored a fund-raiser for Camp Harbor View, the Boston island camp for inner-city kids, at Fenway. At that breakfast, MGM Springfield president Mike Mathis made his sales pitch to the movers and shakers in the room: “Many of you don’t get out to Springfield very often, but we’ve got 950 million reasons why you should.”
Mathis might need to throw a few more pitches. Back in 2014, MGM had told the Massachusetts Gaming Commission to expect $418 million in gross gaming revenue in the first year, ramping up to $500 million by year three. That forecast may have been ambitious: The Springfield casino actually brought in $143 million in gaming revenue during its first six months (plus a week in August). MGM is on track to fall under $300 million for year one. Uh oh.
State budget writers have stakes at this table, too, with a 25 percent tax on gaming revenue. Some simple math: a $100 million revenue miss equals a $25 million shortfall in potential tax collections.
Boston College gambling expert Richard McGowan says MGM’s move to team up with the Red Sox was a smart one. (Disclaimer: Sox principal owner John Henry also owns the Globe.) McGowan says the deal gives MGM a “first mover advantage,” with the $2.6 billion Wynn casino looming in Everett. Wynn’s Encore Boston Harbor complex is slated to open in late June, assuming it survives an ongoing review by the gaming commission. Plus, McGowan notes the Red Sox partnership could be useful for MGM if sports-betting becomes legal here.
The competition could get even tougher, with rivals Foxwoods and Mohegan Sun joining forces to build a new casino in East Windsor, Conn., on MGM Springfield’s southern flank. The timing of that project is unclear, but it received a crucial boost last month from the US Interior Department.
Lasell College professor Paul DeBole has closely followed MGM’s Springfield receipts. His verdict: MGM hasn’t given gamblers enough of a reason to go there, versus casinos closer to their homes. If Wynn succeeds in gobbling up the Greater Boston gambling market, that could be a big problem for MGM.
A spokesman for MGM declined to connect me with a company executive. Instead, he provided a corporate statement describing how business “continues to ramp up” in Springfield and how casino management has been humbled by the positive response from its 15,000-plus daily visitors.
MGM chief executive Jim Murren had a similar response when asked about Springfield by an analyst during the company’s earnings call in February. Hotel, food, and drink revenue were strong. Gaming? “Slower, but ramping.”
Yes, it’s still early in the season. Murren, Mathis, and the rest of the MGM team know they will need gamblers from Greater Boston to help break this slump.