Schenectady

Another roll of the dice: Schenectady’s Rivers, Saratoga’s racino get new Mass. neighbor

Billion-dollar casino in western Massachusetts will open Aug. 24, cast marketing net in all directions
An architectural rendering of the MGM Springfield casino, which is scheduled to open Aug. 24, in Springfield, Mass
PHOTOGRAPHER:
An architectural rendering of the MGM Springfield casino, which is scheduled to open Aug. 24, in Springfield, Mass

Categories: Business, News, Schenectady County

The crowded Northeast gambling industry will gain a new player in less than three weeks, as one of two large casinos under construction in Massachusetts opens its doors.

The coming of MGM Springfield on Aug. 24 will offer a glittering new alternative to casino patrons in eastern New York, potentially siphoning off revenue from the casinos already operating here.

Top executives at MGM Springfield and another large new casino, Resorts World Catskills, say they are aware that the public’s gambling dollar is not infinitely expandable. So they are designing their new facilities to offer a broader experience that will build revenue streams other than gambling.

And if they can attract customers from competitors in the process, that’s OK too. 

Moody’s Investors Service warned about this in a January report. While it noted that the opposite had happened so far in New York — gambling revenue was sharply higher here with the expanded options — it said there is the risk of revenue cannibalization across state lines within the Northeast region as the casino market becomes saturated.

The two gambling venues in the Capital Region fared very differently during the first year of limited legal casino gambling in New York state. 

Saratoga Casino Hotel, a 14-year-old racino with horse racing and electronic casino-type gambling terminals, has suffered a 18.7 percent drop in total money gambled and a 20.2 percent drop in net revenue during the first fiscal year it had to compete with Rivers Casino & Resort, 20 miles south in Schenectady.

Rivers, meanwhile, got off to a slow start after its opening in February 2017, missing projections for revenue and tax payments to host communities in its first year. But revenue has been on the upswing since then, stronger so far in every month of the second year than in the same month of the first year.

This happened as Resorts World Catskills entered the upstate casino market on a much larger scale than Rivers, a 140-minute drive south.

MGM Springfield will be a 107-minute drive from Rivers. What impact it will have, if any, remains to be seen; what competitive strategy Rivers is preparing is unclear, as management would not discuss it for this story.

Rivers Assistant General Manager Justin Moore said only: “Our focus is on continuing to provide a great customer experience at Rivers Casino & Resort.” 

Saratoga Casino Hotel did not respond to telephone and email requests for comment for this story.

However, leaders of MGM and Resorts World were willing to discuss plans and strategies with The Daily Gazette.

MGM SPRINGFIELD

Alex Dixon, general manager of MGM Springfield, said his operation sees Capital Region residents as potential customers and will be marketing itself here.

“We do think we’ll get some folks from the Capital Region who’ll want to give our facility a shot,” he said Friday. “We’re going to be marketing into Boston, Worcester, down in Hartford, and the Capital Region.”

Rivers, with its $350 million construction cost, is much smaller in size and scope than the $960 million MGM Springfield. Closer, more lucrative and much larger than Rivers are two long-established Indian casinos in Connecticut: Mohegan Sun (83 minutes from MGM Springfield) and Foxwood (92 minutes).

“Mohegan and Foxwoods have done a very nice job for a very long time,” Dixon said. “We’re really focused on bringing something new.”

The something new is an evolution of the casino experience to include many more options for entertainment (and spending money) than the gambling floor. The whole complex occupies14 acres in the heart of downtown Springfield, with tie-ins to the historic features of the city and multiple partnerships, most notably with the 8,000-seat MassMutual Center next door.

“A bit of this is the rebirth of Springfield, giving people a reason to come back downtown,” Dixon added, noting that the city has invested $6 million in streets, sidewalks and other downtown upgrades. The casino alone will employ 3,000 people, and there’s a ripple effect as other businesses try to capitalize on it.

“People along Main Street are sprucing up their facades,” Dixon said. “It’s literally night and day.”

MGM Springfield will have one year as the grand new casino in Massachusetts. Then, in 2019, Encore Boston Harbor will open its doors on the banks of the Mystic River.

Approximate price tag: $2.5 billion.

RESORTS WORLD

Like MGM Springfield, Rivers Casino in Schenectady was part of a transformative project, as the anchor of a new $500 million community built where a former locomotive factory had sat rusting for decades.

Resorts World Catskills, with its $1.3 billion price tag, is potentially an even bigger game changer for its host community, Sullivan County. It’s already created more than 1,000 jobs and is credited with a surge in sales tax revenue. When the project is complete in 2019, the workforce is expected to hit 2,200.

Executive Vice President Charles Degliomini said the company recognizes that the casino market is crowded and gambling revenue is finite. 

“More competition is not necessarily good,” he said.

Resorts World’s strategy is to be better than its competitors, and to build four distinct revenue streams: The casino; an entertainment village; an indoor waterpark; and a golf course. The details stand out: 2,200-square-foot guest villas with butler service; celebrity chef restaurants; private gambling salons for high rollers; a mini casino within the main casino catering to Asian-American guests.

“We’re really a resort destination, with extreme high-end amenities,” Degliomini said. 

Some casino operations seek the regional day-trip gambler, others try to attract multi-day visitors. Resorts World Casino intends to go after both, Degliomini said. 

“They’re not mutually exclusive,” he explained.

Rivers Casino & Resort seems to be designed for the regional clientele, though it hasn’t commented in detail on its marketing strategy since it opened. It includes a hotel, spa and restaurant in its site on the Schenectady waterfront, bearing out the “resort” aspect of its name. But it’s nothing on the scale of MGM Springfield or Resorts World Catskills.

“MGM is a well-known property,” Degliomini said. He expects the global resort company will try to capture both the regional and destination market at its new Springfield location, reaching into the Capital Region in the process.

“The good news is Rivers is already a mature facility,” Degliomini said. “I’m pretty confident that Rivers will hold its own against MGM. They’re probably already working on their counter-programming or counter-marketing strategy now.”

Leave a Reply