A downtown casino project is one of the most significant developments in Massachusetts’ second-largest Gateway City, Springfield. iStock photo
Massachusetts law defines “Gateway Municipalities” as those having populations between 35,000 and 250,000, where median household incomes and percentages of residents with bachelor’s degrees are below the state average.
Situated in western Massachusetts on the Connecticut River, Springfield has more than 150,000 residents, making it the fourth-largest city in New England after Boston, Worcester and Providence.
The city once hosted manufacturing sites for motorcycles, railway cars and automobiles, including Rolls-Royce luxury vehicles. Springfield still has a Smith & Wesson firearms factory, although that manufacturer’s headquarters and much of its manufacturing capacity recently relocated to Tennessee. Massachusetts Mutual Life Insurance Company and Meriam-Webster continue to call Springfield home.
Springfield has also made noteworthy cultural contributions. It is the birthplace of basketball and Theodor “Dr. Seuss” Geisel, and it offers museums honoring both of them. The American Hockey League, a minor league that develops players for the National Hockey League, is headquartered in Springfield.
Also, since 2018, Springfield has been the home of the MGM Springfield resort casino.
Stiff Upfront Payments for State License
Legalized casino gambling is a recent phenomenon in Massachusetts. The commonwealth passed legislation in 2011 allowing up to three destination resort casinos and one slot parlor in Massachusetts.
This legislation did not legalize casino gambling outright. Instead, it created a regulatory environment where a few well-financed applicants could secure casino licenses after prevailing in a demanding bidding process and paying hefty sums to state and local governments.
As a result, Massachusetts is now home to MGM Springfield and Encore Boston Harbor in Everett, both of which offer full casino gambling, as well as Plainridge Park Casino, a slot parlor in Plainville.
The Massachusetts Gaming Commission is the state agency responsible for regulating the gaming industry. It awarded a resort-casino license in 2014 to Blue Tarp Redevelopment LLC, an MGM affiliate. At the time, MGM was already actively acquiring property in Springfield.
The award of the western Massachusetts casino license to MGM accelerated its acquisition of a 14-acre site surrounded by State Street, Main Street, Union Street and Interstate 91 in Springfield. This site had been heavily damaged by a rare Massachusetts tornado in 2011.
After assembling the casino site, Blue Tarp transferred it to MGM Springfield Redevelopment LLC, a limited liability company established under Massachusetts General Laws Chapter 121A. That statute offers developers who invest in blighted areas exemptions from real estate tax assessments, in exchange for fixed alternative payments.
MGM paid dearly for its casino gambling license. Its licensing fee was $85 million, and it committed to a $500 million capital investment in its casino-hotel. The commonwealth receives 25 percent of gross gaming revenues from the casino.
MGM Springfield also entered into a host agreement with the city of Springfield, requiring an advance payment of over $15 million, plus annual community impact payments, development grants, Chapter 121A payments and other commitments totaling some $26 million per year. The host agreement required MGM Springfield to create at least 2,000 construction jobs and 3,000 permanent jobs, with positions reserved for local residents, minorities, women, and veterans.
Christopher R. Vaccaro
Beyond Slots, Resort and Convention Space
The completed project includes a 251-room hotel and 125,000 square feet of gaming space with over 1,500 slot machines, a poker room and table games. The facility also includes ample retail and convention space, and a parking garage.
In 2023, MGM Springfield opened a sports book after paying the commonwealth another $5 million for a five-year sports wagering license, for which the casino pays a 15 percent tax on gross sports wagering revenue. BetMGM also obtained a sports wagering license tethered to the casino, under which it pays a 20 percent tax on gross wagering revenue.
According to the Massachusetts Gaming Commission’s public records, MGM Springfield generated over $272 million in total gaming revenue and $68 million in Massachusetts taxes in each of 2023 and 2024. About three-quarters of this revenue comes from slot machines. Most of the sports book revenue is derived from BetMGM.
In 2024, the first full year that the casino had a sports wagering license and for which figures are available, BetMGM generated over $41 million in taxable revenue and almost $8 million in taxes.
The tax revenues and impact fees from MGM Springfield and other licensed casinos are dedicated to local aid, education, healthcare, transportation and other worthy government priorities. This revenue will potentially make positive differences throughout the commonwealth.
Still, to some Massachusetts residents, Springfield will always be thought of as the hometown of basketball, Dr. Seuss and the American Hockey League.
Christopher R. Vaccaro, Esq. is a partner at Dalton & Finegold, L.L.P. in Andover. His email address is cvaccaro@dfllp.com.
