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A year later, MGM Springfield slow to make inroads in crowded gambling market

The scene inside the MGM Springfield. Suzanne Kreiter/Globe staff/Globe staff

SPRINGFIELD — A year ago, eight Clydesdales clopped down Main Street behind a 1923 Rolls-Royce carrying city and casino leaders, a grand procession to celebrate the opening of MGM Springfield.

The $960 million resort casino, the state’s first, carried the hopes of a struggling city, hailed as a catalyst for a downtown left forlorn by decades of economic decline and a 2011 tornado.

Reality has not yet lived up to the hype or the hope.

MGM’s gambling revenues have come in far below projections. The number of employees has fallen sharply. “For lease” signs still hang in storefront windows downtown.


And parent company MGM Resorts International’s commitment to the city came into question this spring when the company acknowledged it was in talks to buy Wynn Resorts’ $2.6 billion casino in Everett, a deal that would have forced MGM to relinquish its Western Massachusetts license and presumably sell the property.

Analysts say MGM, despite bringing several high-profile entertainers to town, has struggled to pull gamblers away from Foxwoods and Mohegan Sun in Connecticut and now faces a new threat from the Everett casino, which opened in June.

MGM Springfiield president Michael Mathis. Suzanne Kreiter/Globe staff/Globe staff

To be sure, an increasingly saturated casino market has knocked back gambling revenues across the Northeast, but that doesn’t diminish the specific challenges that MGM faces as it marked its first birthday this past weekend.

“They have some very rugged competition,” said the Rev. Richard McGowan, a Boston College professor who closely follows the gambling industry. “I think the MGM Springfield people thought they were going to dominate the whole area and they haven’t dominated at all. They’re going to have to learn to compete a lot more, because it’s not going to get any easier.”

City officials and casino executives say MGM’s first year has been a success, drawing nearly 6 million visitors, notching good numbers at the casino’s hotel and restaurants, and bringing thousands of jobs and millions of dollars of revenue for small businesses in the area.


MGM Springfield president Michael Mathis said last week that economic figures show “the city is better off since we’ve opened than the year before.”

“And that’s because we bring thousands more people than we can feed every day and thousands more people than we can lodge every day. And where’s that business going to? It’s going up and down the street.”

Springfield’s mayor, Domenic J. Sarno, a leading casino proponent who is up for reelection this year, said the project has spurred a ripple effect.

Springfield mayor Domenic J. Sarno in his office. Suzanne Kreiter/Globe staff/Globe staff

“It means vibrancy for the City of Springfield, that’s what it means. And there’s been a tremendous amount of spinoff effects and more to come. More to come,” he said in a City Hall interview last week.

Sarno emphasized the boost that local businesses receive from the big-name acts that MGM is bringing into the city, playing at the casino and the MassMutual Center.

“Aerosmith! Four shows! 23,000 people downtown!” he said. “I wanted the spinoff effect. Having all those people, you talk to my bars and restaurants in the area, they say, ‘Dom, we love it.’ ”

A few blocks down Main Street from the casino is Nadim’s Downtown, a 114-seat restaurant that serves chicken kabobs, hummus, and an array of other Mediterranean cuisine.

Its founder, Nadim Kashouh, said that business is “definitely up” since the casino opened.


Sales have been “consistently double-digits” above the same month last year, he said.

That boost in customers was part of the plan. Whereas most casinos are self-contained, MGM Springfield was designed to blend into the downtown area, driving patrons to nearby restaurants, shops, and other businesses.

But although the company projected more than $400 million in first-year gamblingrevenues, through 49 weeks it had brought in just $253 million, a massive shortfall.

On a recent earnings call, the chief executive of the casino’s parent company, MGM Resorts International, acknowledged that Springfield had not lived up to expectations.

“If we are behind in some place, like we’re behind in Springfield, we’re ahead in many other places,” James Murren told investors.

As a result, the casino has shed hundreds of jobs since it opened, although Mathis emphasized that MGM employees are paid well and receive benefits. “I like to focus on the 2,300 jobs or so that we are providing,” he said.

Mathis noted that a Wahlburgers is poised to open soon at the casino, and a CVS is coming in across the street, two signs of good things to come.

He said the CVS will provide new amenities, making the area more attractive to residents and justifying new market-rate housing, a virtuous cycle “that we’ve helped to kick-start,” he said.

Last Monday evening just after sunset, the gaming floor was low energy. Several people played blackjack quietly. An elderly woman on oxygen poked at one slot machine’s buttons. A man with a cane looked sadly at another.


The casino’s other attractions seemed to be drawing more people. Several diners smiled as they exited MGM’s TAP Sports Bar. Children holding hands with their parents walked near the Regal movie theater, which is part of the casino complex.

Patronslast week lauded the transformation so far, speaking highly of the restaurants, hotel, movie theater, and general atmosphere without mentioning the actual casino much.

Caren Joy, a 71-year-old Agawam resident, comes regularly to the casino with friends to drink cocktails, watch a movie, eat dinner, and gamble.

“We call this our MGM Monday night movie night,” Joy said as she and her crew, all smiles and laughs, meandered out of the sports bar.

Joy said she and her friends rarely came downtown before the casino but now, at MGM,they feel “very safe, very secure.”

Ray Bouchard, 80, has come to the casino about six times so far. He makes the trek with his wife from their home in Colchester, Vt., because MGM is one of the closest nonsmoking casinos.

“The others, you come back out of there and you smell like an old chimney,” he said, grimacing at the thought.

Sue Lyons, 53, from Enfield, Conn., was sitting outside one of the casino’s entrances with her parents, as she and her father picked at a tub of popcorn. Lyons used to go to Foxwoods and Mohegan Sun, but this is her spot now. It’s only 15 minutes from her house and meets the most important metrics.


“It’s clean. I feel safe,” she said, noting the presence of police, security officers, and K9 units. That’s something that’s important, “especially these days.”

But safety is not permanence. Although casino executives say they are looking forward to many more anniversary celebrations, some patrons have doubts.

“I’m interested to see — well it’s a matter of longevity,” Joy said.

What did she mean by that? She answered with an existential question.

“Will it survive?”

Joshua Miller can be reached joshua.miller@globe.com.