MGM Springfield has been the source of much controversy between MGM Resorts, Foxwoods, and Mohegan Sun.
John DeCree, an analyst for Union Gaming in Las Vegas, said that a joint venture between Mohegan Sun and Foxwoods Resort Casino would make the most sense, if the MGM Resorts decided to sell MGM Springfield. Industry experts have speculated recently that MGM Resorts might buy Wynn Boston Harbor, a move which would require the Las Vegas casino company to sell the Springfield resort.
Mr. DeCree said in a report published last week, “We believe some combination of Mohegan Sun/Foxwoods and a [real estate investment trust] would make the most sense for Springfield. It would eliminate an immediate competitive threat to the Connecticut casinos and offer a growth opportunity without development risk.”
Under Massachusetts gaming law, no casino company is allowed to own more than one gaming license at a time. MGM Resorts won a license to build a $950 million casino-resort in Springfield in Western Massachusetts. The MGM Springfield is set for a grand opening later this year.
MGM Resorts Could Buy Wynn Boston Harbor
Meanwhile, MGM Resorts International appears to be exploring the possibility of selling the Wynn Boston Harbor, a $2.4 billion casino-resort in the Boston metropolitan area city of Everett. Wynn Resorts won the Boston-area casino license in the same licensing process that saw the Springfield development approved. The Wynn Boston Harbor is expected to open in 2019.
A Boston casino would be more lucrative than the Springfield gaming resort, even if it cost more than 2 & 1/2 times as much to build. Proximity to the huge Boston gaming market should make the Everett casino one of the biggest gaming destinations on the US eastern seaboard.
John DeCree: MGM Springfield Buyout Makes Sense
John DeCree’s report comes in the wake of a Wall Street Journal report that said MGM Resorts was in early talks with Wynn Resorts to buy the Everett casino. Matt Maddox, the CEO of Wynn Resorts, said two weeks ago that his company was open to selling the Boston-area development, because they wanted to get maximum value out of their assets.
The Union Gaming analyst wrote that such a transaction makes imminent good sense. DeCree said, “Mohegan Sun suggested they would invest in new projects where there could be a rapid return in capital. An imminent opening casino in Springfield (September, 2018) would fit this parameter.”
Mohegan Sun and Foxwoods Joint Venture
The Mohegan Tribe and Mashantucket Pequot Tribe, which respectively own Mohegan Sun and Foxwoods, are involved in a joint venture to build a satellite casino in the Hartford suburb of East Windsor. The East Windsor casino is 25 miles down the road from Springfield and is designed to build a firewall between Hartford-area gamblers and the MGM Springfield.
If MGM Resorts sold the Springfield casino to the Foxwoods/Mohegan Sun joint partnership, it would eliminate a coming confrontation between the various gaming companies. In fact, it might avoid a much wider confrontation between MGM Resorts and the State of Connecticut.
MGM Resorts Lawsuit v. Connecticut
For the past two years, MGM Resorts has pursued a lawsuit against Connecticut, while discussing the company’s plans to build an integrated casino-resort in the city of Bridgeport. A Bridgeport casino would be lucrative, because of its nearness to New York City. At the same time, Connecticut’s state legislature seems to have little interest in licensing a Bridgeport casino for MGM Resorts.
That underscores the biggest question about a purchase of the Springfield casino buy the two Connecticut gaming tribes. While the DeCree plan make sense on paper, the two sides have been antagonists for the past two years. While they would not be the first adversaries to put aside differences when it made good business sense, it is an obstacle to surmount.
Many Questions Remain Unanswered
For instance, would the people of Springfield welcome the Mohegan and Mashantucket Pequot tribes after two years of seeing them as adversaries? What would the people of East Windsor say about such a deal? What would Connecticut lawmakers say, since they have worked with the tribes for two years based on the idea of keeping Connecticut residents’ gaming stakes inside the state?
No such obstacles exist between MGM Resorts and Wynn Resorts, despite the two companies being major competitors on the Las Vegas Strip and in Macau. In 2000, MGM Resorts bought major assets, including Bellagio, from former Wynn chief executive officer Steve Wynn. Like other big four casinos on the Las Vegas Strip, the two companies also have worked together on regulatory matters over the years. In fact, they often have had similar interest beyond Las Vegas, both in Nevada and China.
