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Upbeat Message From MGM Springfield Head Despite Lagging Revenue, Jobs Numbers

Updated at 5:45 p.m.

The head of MGM Springfield said the city is in better shape than it was before it opened as the casino approaches its one-year anniversary on August 24. 

The comments during a press conference Monday come despite the gambling resort falling well short of revenue projections and expected staffing levels.

In terms of gambling revenue, MGM projected taking in $412 million in its first year, but the latest figures from the Massachusetts Gaming Commission show the Springfield facility had only generated $252.8 million through July.

Mathis said there’s usually a three-year ramp-up period when a casino opens — and the first year is often the hardest. He said the revenue projections were made several years before the casino opened, and that market conditions changed.

Another factor, he said, was some difficulty attracting customers away from the two Connecticut tribal casinos, Foxwoods and Mohegan Sun.

"This market has some really strong competitors that have been in the market for 20-plus years," Mathis said. "I think we may have underestimated that level of loyalty, and what it would take for those customers to give us a shot."

Mathis said he was pleased with how non-gambling parts of MGM Springfield have performed.

MGM Springfield President and COO Mike Mathis speaks with reporters on Monday, August 19, 2019.
Credit Adam Frenier / NEPR
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NEPR
MGM Springfield President and COO Mike Mathis speaks with reporters on Monday.

"We've got one of the most successful hotels in the region," he said. "Our restaurants are some of the most successful, profitable restaurants in the region. I think if you look at it as a whole, we're pretty proud of where we're at."

On employment, the host community agreement with Springfield called for the casino to try to have 3,000 employees when it opened. It hit that goal, but has slid backwards since, and was down to 2,300 as of this spring when the last jobs report was issued to the gaming commission.

Still, Mathis said he hadn’t heard concern about it from any city officials, and instead preferred to focus on the couple of thousand new jobs created in Springfield.

"The people that I've spoken to, and our team has spoken to, are thankful for the 2,300," Mathis said. "These are 2,300 great jobs, well-paying, with benefits, and we're launching careers. Sure, we'd love the number to be higher, because it would be a reflection that the business is higher — and that will come with time."

MGM Springfield is also about 5% percent short of its promised goal to have women make up half of its workforce. Mathis cited one factor for not hitting that number.

"Obviously with security at facilities — that's been my standard answer — which is a little bit...more of a male-dominated department," he said. "Those tend to be dragging down our numbers a little bit."

Mathis has given that same reason for lagging numbers of female employees since before the casino opened.

As for the impact of MGM Springfield on the city, Mathis said the resort has attracted six million visitors and has boosted business for area restaurants and hotels.

Mike Mathis during casino construction.
Credit Ryan Caron King / NEXT
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Connecticut Public Radio
MGM Springfield President and COO Mike Mathis during casino construction.
Storefronts within a block of MGM Springfield.
Credit Sean Teehan / NEPR
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NEPR
Storefronts within a block of MGM Springfield.

"We look at hotel occupancy rates and tax collection," Mathis said. "We look at meals tax, and the city is better off since we've opened than the year before. That's because we bring thousands more people than we can feed every day, and thousands more people than we can lodge every day.”

Some nearby business owners have said, however, they haven’t been seeing that spike in traffic since MGM Springfield opened last August. That’s according to a recent report by NEPR.

Mathis also maintained there was no lasting damage done by MGM’s interest in acquiring the Encore Boston Harbor Casino earlier this year. Prior to its opening this summer, Encore was under investigation by state gambling regulators about its handling of sexual abuse allegations against company founder Steve Wynn. And MGM looked into buying the property, despite a state law forbidding casino operators from holding more than one license.

"We've talked to our local stakeholders, the mayor, different legislative representatives," Mathis said. "We've talked to our employees. And they recognize we are a Fortune 500 company. We have an obligation to look at any opportunity, and that's what we did, and we passed on it. We're as dedicated to Springfield as we ever were."

Mathis also addressed possible increased competition from Connecticut. The operators of Foxwoods and Mohegan Sun are looking to partner on a casino in East Windsor, a short drive from Springfield. Mathis said he thinks a casino in Bridgeport would be a better fit for Connecticut to help keep revenue from escaping to New York.

MGM has shown interest itself in that market.

As for East Windsor, Mathis said his resort could handle the competition.

"I think we've proven that we can compete, whether it's Encore or the tribes," he said. "We've grown the market, and what we provide in Springfield is really unique. Would I like to see a competitor farther away? Of course we would, but it's not something we're obsessed over."

MGM, however, sued the U.S. Department of the Interior this month over its approval of the East Windsor facility.

Mathis said MGM is pushing Massachusetts state legislators to approve sports gambling this fall. Several bills have been filed on Beacon Hill looking to do so, including by Governor Charlie Baker.

"In our other markets, we've seen as much as a 10% increase to the rest of the business, because people stay here longer, they go to restaurants, and they support the facility above and beyond the sports betting business," Mathis said.

Mathis added that MGM Springfield could have a sports book up and running quickly, if lawmakers and the governor were to make sports wagering law.

Adam joined NEPM as a freelance reporter and fill-in operations assistant during the summer of 2011. For more than 15 years, Adam has had a number stops throughout his broadcast career, including as a news reporter and anchor, sports host and play-by-play announcer as well as a producer and technician.
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