June Gloom For MGM Springfield as Gaming Revenue Slumps 10.5 Percent From May, Second-Worst Month Since Opening

Posted on: July 17, 2019, 04:00h. 

Last updated on: July 16, 2019, 05:24h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

MGM Springfield struggled to jumpstart gross gaming revenue (GGR) in June, notching its second-worst month by that metric since opening in August 2018.

MGM Springfield where the operator is struggling to lift gaming revenue. (Image: BusinessWest)

The casino, which has been struggling to meet revenue targets since inception, posted June GGR of $19.95 million, down 10.5 percent from May, according to data from the Massachusetts Gaming Commission (MGC). June 2019 represented MGM Springfield’s second-worst GGR month in the 10 months the venue has been open. In January, GGR was $19.7 million at the first integrated resort in Massachusetts.

The Massachusetts Gaming Commission today (July 15) reported that the month of June 2019 at Plainridge Park Casino (PPC), MGM Springfield and Encore Boston Harbor generated approximately $50 million in gross gaming revenue,” according to a statement from the MGC.

MGM Springfield and Wynn Resorts’ Encore Boston Harbor are considered category one casinos in the Bay State and as such, are subject to 25 percent tax on GGR. PPC is a slots-only establishment. Last month, MGM’s lone Massachusetts property sent $4.98 million to state coffers, also the lowest total since January when the gaming venue generated $4.92 million in receipts for the state.

Excluding August 2018 when MGM Springfield was open for just nine days, January 2019 and June 2019 are the only two months the casino has been operational when it failed to generate at least $5.31 million in tax revenue for the state, according to MGC data.

A New Sheriff In Town

When MGM opened its New England property last August, the company said it was aiming for GGR of $400 million in the first 12 months. It’s going to take a run of unbelievably good luck for the casino, horrid streaks by its betting patrons or a combination of the two for $400 million to be hit by the end of next month. At the end of June, MGM Springfield’s GGR since opening stood at $232.42 million.

The property’s revenue shortfalls come amid increased competition. Wynn’s Encore Boston Harbor opened on Sunday, June 23. While a Sunday may be an unusual to open a gaming establishment, that casino posted GGR of $16.78 million in just eight days, according to the MGC.

Industry analysts assert that MGM Springfield and Encore Boston Harbor are not competing for the same clientele, but is clear the specter of the Wynn property is on the minds of other New England casino operators.

Last month, management at MGM Springfield announced the closure of the property’s Starbucks. The coffeehouse is being replaced by a new area dedicated to VIPs as MGM looks to lure more big spenders to the venue.

MGM executives have said the Springfield property has been successful in luring visitors from throughout New England, except for Eastern Massachusetts, one of the wealthiest parts of the region. That happens to be the part of the state Encore Boston Harbor is located in.

Other Offerings

MGM Springfield has 125,000 square feet of gaming space, but that is dwarfed by the 210,000 square feet at Encore Boston Harbor, but the former looking to other amenities to get guests in the door and to the tables.

The Springfield property is looking to take advantage of good weather before its gets cold in New England with outdoor food offerings and the MGM Live concert series, both of which are proving successful, according to MGM exeuctives.

The operator is betting MGM Live and promotions, such as “Food Truck Friday’s” will eventually boost GGR.