There is something to be said for online gambling. The ability to lounge around the house and visit virtual casinos means not having to deal with traffic, standing in line to exchange chips or dealing with someone’s smelly feet at the tables. Baby Boomers and those of other generations didn’t have as many digital options, but Millennials and Generation X-ers have been born into it. It’s normal and part of the instant gratification experience that brick-and-mortar casinos can’t offer. These casinos are getting concerned, too, looking down the road, that the trend will only deepen and MGM is trying to keep the tide from changing. The MGM Springfield, already not able to perform to expectations, has launched a new casino space that it hopes will become a hit with the younger gamblers.
This past weekend, the Massachusetts property celebrated one year in operation and brought in big names such as Aerosmith to mark the occasion. MGM CEO Jim Murren was on hand, as well, to help with the unveiling of MGM Springfield’s new “stadium casino” area. It’s a new hip spot where gamblers can play blackjack, roulette, variations of baccarat – all at the same time and all digital on computer screens that feature live dealers.
It’s an attempt to bring in gamblers who are known to favor smartphones, tablets and computers as they take to virtual gaming tables. Whether or not it will meet its intended goal remains to be seen; however, MGM has to do something to turn things around. MGM Springfield was expected to see as much as $412 million in gambling activity its first year. After its first 11 months, though, the venue’s gross gaming revenue reached just $252.8 million – well short of the goal.
The reason for the lack of success comes from MGM’s brass not properly estimating the playing field. Despite multimillion-dollar salaries to pay for their experience and expertise, and despite money dropped on feasibility studies to explore the Massachusetts landscape, MGM executives miscalculated the market strength both Mohegan Sun and Foxwoods, just across the border in Connecticut, have on the area. They also failed to consider the evolution of the gambler away from retail establishments and toward online portals.
Mike Mathis, the president of MGM Springfield, acknowledges that his company made some mistakes in anticipating the venue’s potential. Speaking with the Hartford Courant a week ago, he stated, “This market has some really strong competitors that have been in the market for 20-plus years. So, I think we underestimated that level of loyalty and what it would take for those customers to give us a shot.”
MGM dumped about $960 million into building, outfitting and staffing MGM Springfield. That’s a lot of money to risk on getting “a shot” from potential customers.
