Springfield Officials Say MGM Casino Still Owes $2.3m in Contractual Payments

Since March, the casino industry across the United States has been left in disarray. Casinos shut down in March to try and slow the spread and began reopening in May and June. In Massachusetts, it took quite some time for facilities to reopen and they are still not operating at full capacity. Hundreds of millions in casino revenues were lost, which led to issues with the casinos including unemployment. For the MGM Springfield, the property fell behind on payments to its host city of Springfield and the city says they still owe $2.3 million.

Payment Delays

The payment was delayed by the casino since April because of the pandemic. However, the city still wants to receive their money. Officials have said they are talking with MGM and are happy with the ongoing discussions to try and resolve the issue.

Earlier this week, Springfield Mayor Domenic J. Sarno said that the city continues to hold the casino under its contractual obligation based on a host community agreement. Sarno said that after the temporary deferment period, he expects and will demand that the funds be provided by MGM Springfield on behalf of the taxpayers.

City officials plan on continuing discussions with the casino as well as the Massachusetts Gaming Commission on the impact of the coronavirus pandemic on the obligations of the casino under the agreement.

Back in April, MGM paid just over $5.5 million to the city and said this was a partial payment towards the over $7.7 million owed base on the agreement. President and Chief Operations Officer of the facility, Chris Kelley, said that MGM will meet its requirement.

Seeking Relief

In March, when the virus first made a big impact on the industry, the casino filed a force majeure notice with Springfield. They wanted to be provided relief from certain financial obligations due to the virus as it was beyond reasonable control. The request cited the Gaming Commission’s requirement for casinos in the state to close because of the virus.

The property has faced financial challenges since reopening back in July. The casino must follow strict guidelines set by the state to prevent the spread of the virus, which means a lower capacity on-site as well as following certain protocols like cleaning and social distancing. The requirements cost money as well and with less funds coming in, it has become more difficult for operators to meet all financial obligations.

Gross gaming revenue reports for last month have yet to be released, but they are coming this week. Once this information is provided, then we will have a clearer picture as to how the venues are faring when it comes to earnings.

There is no doubt that the numbers will be lower when compared to last year. However, hopefully they will be higher than August and continue to increase as the properties try to get back to some sense of normalcy.

Mayor Sarno said that he and his administration will continue to work with the businesses, whether they are large or small, to help them stabilize.

Rebecca Kont
Rebecca Kont

Rebecca lives in Las Vegas and after completing her degree at Reynolds Journalism school joined the USGS team to pursue her journalism dreams.