Gambling

Springfield (Mass.) City Leaders Favor MGM Casino Plan


Springfield (Mass.) City Leaders Favor MGM Casino Plan

Photo illustration by 731; Slot machine photograph by Tony Cordoza/Alamy

Former football star Doug Flutie showed up in Springfield, Mass., for a charity auction last December as a guest of Penn National Gaming (PENN). The casino also delivered a $25,000 check to a fire-damaged day-care center. MGM Resorts International (MGM) funded Springfield’s July 4 fireworks, a float-filled Thanksgiving parade, and a holiday lights display.

Almost a third of the residents of Springfield, in the western part of the state, live below the poverty line. The gambling companies have been lavishing attention on the city, home of gunmaker Smith & Wesson (SWHC) and MassMutual Financial Group, in hopes of winning one of Massachusetts’s first three casino licenses. The state’s gaming commission has the power to decide where casinos will open in western, central, and southeastern Massachusetts. The gaming companies must first get a nod from local officials—and voters. That meant a shower of perks and souvenirs for Springfield residents as Penn National and MGM tried to outdo each other to win them over.

On April 30, Mayor Domenic Sarno announced that MGM’s $800 million resort plan had clinched the endorsement of city leaders. “This is a game changer,” says Sarno. “It will be the leading urban development in the nation.” Springfield voters still have to approve the proposal in a special election in July. And MGM will have to convince the state gaming commission that it should prevail over Hard Rock International and the Mohegan Tribal Gaming Authority, which are also chasing the lone license for western Massachusetts. Springfield officials say they’re confident they’ve picked the company that knows how to close a sale.

MGM’s pitch to Springfield began with a storefront headquarters downtown, where it handed out company-branded totes that soon became ubiquitous. The gaming giant had its logos embroidered on the local semipro basketball team’s uniforms, and became one of the biggest sponsors of the Springfield Falcons, an American Hockey League team. The MGM lion hangs from its scoreboard, stands behind the goals, and even shows through the ice. The company also papered walls of one rink entrance with colorful drawings so hockey fans arriving for a game felt like they were walking onto the floor of an MGM casino. “It’s intense,” says Chris Thompson, the team’s vice president for business development. “It’s something I’ve never experienced.”

Submitting its official proposal to city leaders earlier this year, Penn National stuffed a four-inch binder with color photos, drawings, and lots of charts. MGM, with true Las Vegas glitz, put its proposal in a leather trunk. Lifting the lid prompted a DVD player inside to start a movie about the casino, and accompanying leather-bound photo books showed community events MGM had sponsored. The package was so expensive, says James Ferrera, president of the city council, that it exceeded the limit on gifts to a council member. (They’re all sharing one.) “We’ve never seen any presentations that are anything like this,” Ferrera says.

MGM promised to bring both a bull-riding event and rapper Pitbull to the city this year. In May the company’s CEO will be the honorary chair of the city’s annual pancake breakfast for 14,000. MGM spent $10 million on marketing and the architectural renderings, says Bill Hornbuckle, the company’s president.

If the state gaming commission grants MGM the license, the company will pay Springfield $15 million upfront. Once the resort opens, annual payments to the city are expected to total at least $25 million. “I understand their stock went up 3 percent,” Sarno said after announcing that he and his colleagues had picked MGM. “Maybe I should have asked for more money.”

The bottom line: MGM spent $10 million campaigning in Springfield as part of a plan to build an $800 million casino in western Massachusetts.

Linskey is a reporter for Bloomberg News in Washington.
Palmeri is a reporter for Bloomberg News and Bloomberg Businessweek in Los Angeles.

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Companies Mentioned

  • PENN
    (Penn National Gaming Inc)
    • $13.63 USD
    • -0.01
    • -0.11%
  • MGM
    (MGM Resorts International)
    • $21.11 USD
    • 0.34
    • 1.61%
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