Affluence of Region Sure to Lift Springfield
BOSTON -- At its new casino in Springfield, MGM plans to tap into the discretionary income of Massachusetts, Connecticut and New York residents to lift a city that the gambling giant’s CEO described Thursday morning as “down on its luck.”
“This is a very affluent area,” MGM Resorts International Chairman and CEO Jim Murren told CNBC’s Contessa Brewer and Squawk Box host Joe Kernen during a TV interview on the eve of the casino’s opening. “We’re in western Massachusetts. It will capture a regional market of New York, northwestern Connecticut, Massachusetts. It’s a city that was down on its luck for many years. We’ve developed something here, a real urban renewal project. We’ve put 3,000 men and women to work. I think we’re going to get a good return but I’m really gratified by the fact that we’re here helping this city pull itself up.”
The first resort casino in Massachusetts is set to open on Friday amid a prolonged economic recovery that began after the Great Recession of 2009.
“We do OK in tougher markets but we definitely benefit if the consumer is healthier because this is a discretionary purchase so yeah, we’re pleased with the macros,” said Murren.
While 40 percent of Massachusetts residents in 2014 supported a ballot question prohibiting casinos, public opinion about the casino in the Springfield area is “great,” Murren said, while adding that “it was very poor early on and it’s improved.”
“People are literally crying for joy that they have these jobs,” he said.
Murren brushed off the competition from Foxwoods and Mohegan Sun in Connecticut and the emerging Wynn Resorts-backed Encore Boston Harbor casino in Everett.
“We’re used to competitive markets and we have a track record,” he said. “It’s kind of almost unfair for people to compete against us because we’re the biggest entertainment company. We’re the market leader everywhere we go.”
Noting MGM had purchased the Yonkers Raceway/Empire City Casino in Yonkers, N.Y., Brewer asked Murren if the company was overextended on the East Coast.
“We just don’t feel that way. The ability to cross market between these properties is very high,” he said, noting company data points the likelihood of attracting customers that are not currently wagering at MGM facilities.
Then he pivoted to an emerging new aspect of gaming in the United States, legal sports betting. “We believe that with our regional jet service that we have, we’ll be able to move people all around the Northeast,” Murren said. “And in fact the Yonkers casino that you’re referring to, once sports betting is approved in both New York and here in Massachusetts, will be a great linkage between these two properties.”
A few states have rolled out sports betting in the wake of a U.S. Supreme Court ruling this year permitting it. On Beacon Hill, momentum has not developed behind sports betting and the Legislature is taking its time on the issue, planning to delve into the matter in 2019.
MGM in May announced its agreement to acquire the Empire City Casino and race track for $850 million, enabling the company to establish a foothold on a 97-acre property in southern New York, about 15 miles from Times Square in Manhattan.
Describing Murren as a Republican and “outspoken supporter” of Hillary Clinton in the 2016 election won by President Donald Trump, Kernen asked him whether he still wished Clinton had won. “I do, yes,” said Murren.
Pressed to explain why, Murren said, “Obviously the economy was expanding going into 2016. I can’t tell you what it would look like under a different administration but what I was talking about to you then and I talk about now is what we care about, what I care about in terms of trade, in terms of immigration, in terms of diversity and inclusion. I just felt at that point in time the more qualified candidate was Secretary Clinton. But those were my personal views. I represent a company of 8,000 people. The majority of my employees are minorities.”
He added, “That said, look, we’re doing well as a company. I like deregulation. The tax code benefitted me and our company. And I think that the economy certainly is on the right track. I’m proud of what we’re doing to contribute to that as a middle-class job creator.”