Two months past, the rumor mill whirred with whispers of MGM Resorts International musing over a potential divestment of its regional properties in the heartland of Ohio and the historical city of Springfield, Massachusetts. As the murmurings rippled through the city corridors, Springfield officials took a firm stance, ensuring that any hypothetical transaction would rigidly adhere to the preexisting decrees established by the host city agreement.
Stepping into the time machine and rewinding back to March, innuendos began to circulate, suggesting that MGM Resorts could be discreetly considering the offloading of two of its eminent properties – MGM Springfield and MGM Northfield, a thriving racino located just a stone’s throw from Cleveland. The former, which took the prestigious title of the first traditional casino in Massachusetts upon its opening in August 2018, sad to say, didn’t turn out to be the golden goose as originally projected. Despite crafting wavelets by generating a hefty $278 million in revenue back in 2023, MGM Springfield proved to be a letdown, short of the lofty aspirations set by MGM Resorts.
In a recent tête-à-tête with Western Mass News, an unflinching Springfield City Council President, Michael Fenton, was resolute and vehemently enforcer that MGM cannot single-handedly sever ties with the city. Michael Fenton, who adorns the mantle of chair of the casino oversight committee, assured the citizens, “The public should not be troubled as there are robust safety measures at both the city and state level to prevent any unilateral decisions from MGM.”
Peeling back the layers of MGM Springfield’s financial history, the casino bedecking the Massachusetts terrain was erected at a staggering expenditure of $960 million. Fast-forwarding to 2021, the real estate assets switched hands, with MGM selling them to MGM Growth Properties for $400 million. The baton was then passed onto VICI Properties that acquired MGM Growth Properties for a whopping $17.2 billion. Subsequently, this move led to VICI Properties reigning control over an array of MGM’s treasure troves, which included MGM Northfield Park and the Springfield casino.
If MGM Resorts wants to allay the anxieties swirling around Springfield regarding the potential casino sale, the clear course of action would be to scout a buyer from within the gaming fraternity. This is reinforced by the fact that the casino site is explicitly zoned to accommodate gaming activities. As the wheel of uncertainty keeps spinning without revealing any potential buyers, one name that can unequivocally be disqualified is Penn Entertainment due to its stewardship of Plainridge Park Casino in Massachusetts.
Adding to the mix, Fenton firmly stated that any potential successor must be of the same caliber or “pedigree” as MGM. Beyond linguistic semantics, there are concrete expectations in place. As highlighted in the host city agreement, MGM is committed to distribute $25 million in annual payouts to a diverse set of groups within the city and secure at least 12 performances per year in venues in close proximity to the casino.
Casting this pronouncement into future possibilities, a transfer involving MGM Springfield might be imminent. But there’s a cloud of uncertainty hanging over the gaming industry’s mergers and acquisitions due to the prevailing high-interest environment. This bleak financial reality may lead to financial constraints for prospective suitors who require leverage for a bid, possibly shrinking the circle of potential buyers to those who possess enough cash on hand to cover the price.
