MGM Resorts International (MGM) received a license from Massachusetts Gaming Commission (MGC) to operate a resort casino in Downtown Springfield, the Commonwealth of Massachusetts. This project, worth more than $800.0 million, is the first casino to get a license in the Commonwealth. The company succeeded in getting the approval after two years of hearings and background investigations.
Along with MGM, Davenport Properties of Boston will be responsible for the development of the property which is spread over an area of 14.5 acres. Located 90 miles west of Boston, the MGM Springfield mixed-use development project will feature 250 rooms, spa, pool, shops, restaurants and a gaming space spread over an area of 125,000 square feet and various other amenities.
The company had first showed its interest in building a casino at Springfield in Aug 2012. In Apr 2013, the company was chosen by the city of Springfield for the partnership, ahead of four other contenders namely, Penn National Gaming Inc. (PENN) and Ameristar Casinos, now a subsidiary of Pinnacle Entertainment Inc. (PNK), Hard Rock International and Mohegan Sun Casino.
In May 2013, MGM Resorts and the city of Springfield entered into an agreement as per which MGM Resorts would make an upfront payment worth $15.0 million to the City of Springfield during the construction phase of the project. When MGM Springfield gets operational, Springfield will be entitled to annual payments of more than $25.0 million. Project work is set to begin soon with its opening scheduled in early 2017.
The project will employ 2,000 workers during the construction period and 3,000 workers once the casino is operational. The company targets to hire 35.0% of the work force from Springfield that has one of the highest unemployment rates in the state.
MGM Resorts is one of the world's leading companies with significant holdings in gaming, hospitality and entertainment. Apart from the overseas market, the company’s properties are well-diversified within the U.S. as well. This geographical diversification protects the company from regional downturns.
We believe this Zacks Rank #2 (Buy) company stands to gain domestic market share as the economy progresses toward full recovery. Wynn Resorts Ltd. (WYNN) is also worth considering in the same sector with a Zacks Rank #2.