MGM Resorts International is having a busy year. In order to generate more revenue for expansion overseas, this company is working to sell some of its major properties. This week, officials within the company announced they were interested in selling the MGM Springfield.
This Massachusetts hotel-casino has struggled to perform over the past year. It’s disappointing news for MGM, which has invested major resources into this venue. Today, we’re going to look at why exactly this casino could soon go up for sale.
MGM Resorts International Continues to Sell Property
MGM Resorts is one of the biggest and most profitable casino companies in the world. It owns a huge number of gambling venues around the world, including many in Las Vegas. Some of these MGM-owned properties are located on the Strip including the MGM Grand, Mandalay Bay Hotel & Casino, and The Mirage.
This company is undergoing a major transition right now. Recently, MGM revealed that it was working on selling many of its biggest properties. The idea is to sell properties and invest the money towards expansion throughout the US and abroad.
Just last month, MGM Resorts International announced that it sold Circus Circus Hotel & Casino. This venue was purchased by Phil Ruffin, owner of Treasure Island in Las Vegas. It’s unclear exactly what Ruffin plans to do with his new hotel-casino.
To the surprise of many, MGM Resorts International also sold the world-famous Bellagio Casino-Resort last month. It went to the Blackstone Group for an astounding $4.2 billion, making it the largest property sale in Las Vegas history.
Jim Murren, CEO of MGM Resorts International, recently told the media that additional property sales are likely to take place in the future.
Company Officials Are Now Interested in Selling MGM Springfield
Massachusetts has always been considered a lucrative casino market. Until fairly recently, however, no commercial gambling venues were able to operate here. This is no longer the case and today there are several popular privately owned casinos in Massachusetts.
MGM Springfield opened its doors back in August of 2018. At the time, it was the biggest and most impressive gambling establishment in the state. MGM Resorts International invested nearly $1 billion to open this casino in hopes of dominating the New England gambling market.
For a while, it was successful. MGM Springfield drew in thousands of visitors every month and revenue continued to increase. Recently, however, things have been going downhill for this casino.
In June, Wynn Resorts finally opened its own Massachusetts-based casino, called the Encore Boston Harbor. As the name suggests, this venue is located near Boston and immediately gained tremendous success. It’s so successful, in fact, that it’s captured a significant portion of the Massachusetts gambling market.
MGM Springfield’s revenue has continued to drop since the Encore Boston Harbor opened its doors. Officials are now interested in selling this property.
One plan that’s being discussed is selling the venue and then leasing it back. It’s the same strategy that MGM is using for the Bellagio. Some are skeptical that this plan will work in Massachusetts.
Officials Remain Skeptical of MGM’s Massachusetts Casino Sale
Selling a billion-dollar gambling venue doesn’t come easy. Recently, several politicians in Massachusetts voiced their skepticism over the sale of MGM Springfield. Domenic J. Sarno, Mayor of Springfield, spoke on this issue to the media this week.
“(The city has a) very strong Host Community Agreement with MGM and we will certainly hold MGM to this legally binding agreement,” he said. “Part of this mandates the city and the Massachusetts Gaming Commission must approve any and all adjustments to said agreement.”
Others believe that a sale could be completed, yet the lease-back process that MGM is looking for might be more difficult.
It’s clear that MGM Resorts is bleeding cash from this venue. State officials recognize this, as well. Hopefully, they’re able to come to an agreement on how to best proceed next.
Stay tuned for more news on MGM Springfield over the next few months!