{"id":27871,"date":"2020-08-31T09:18:08","date_gmt":"2020-08-31T17:18:08","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=27871"},"modified":"2020-09-02T07:11:42","modified_gmt":"2020-09-02T15:11:42","slug":"dark-portent-for-mgm-springfield-chicago-courts-casinos","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/dark-portent-for-mgm-springfield-chicago-courts-casinos\/","title":{"rendered":"Dark portent for MGM Springfield; Chicago courts casinos"},"content":{"rendered":"\n
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A thousand MGM Springfield<\/strong> employees have been canned, effective today<\/a>. A skeleton crew of 800 keeps the casino-resort open, as it writhes in pandemic economic throes. Reports the Boston Globe<\/em>, “State rules to prevent the spread of the coronavirus have limited the availability of table games, reduced restaurant capacity, and barred large gatherings such as concerts and conferences that are important to casino\u2019s business.” As the story points out, even if all furloughed workers had been restored to their positions, MGM Springfield would be well below the 3,000 jobs it promised the community. (Encore Boston Harbor<\/strong> at its peak only achieved 80% of projected employment.) One positive that Mayor Dominic J. Sarno<\/strong> was able to salvage was that MGM began work last week on 74 apartments it had promised the city.<\/p>\n\n\n\n\n\n\n\n

Sarno told the Globe<\/em> he was confident that the casino would make a robust return to the local economy. That’s despite the fact that MGM has never achieved the optimistic financial projections upon which it sold the casino to city fathers. \u201cMGM is committed to bringing these employees back, ASAP, so that\u2019s our goal,\u201d Sarno said. He added, \u201cWe\u2019ve had a good relationship, and I take them at their word.\u201d Workers, MGM promised, would be brought back “as business improves,” which could take a long time given a depressed economy and unabated Covid-19<\/a>. Casino President Chris Kelley<\/strong> nevertheless vowed, \u201cWhile I understand this is difficult to hear, I want you to know that as we progress through our phased reopening, team members separated today will remain on our recall list, and we have established a system to welcome them back based on business needs, position, and seniority.\u201d<\/p>\n\n\n\n

\"\"The purge in Springfield is part of a much larger downsizing of MGM Resorts International<\/strong>, which is parting company<\/a> with 18,000 of its 68,000 employees. If you’ve already been called back to work you’re safe but if not, you’re probably toast. In a formal severance letter, CEO Bill Hornbuckle<\/strong> wrote, \u201cNothing pains me more than delivering news like this. The heart of this company is our employees and the world-class service you provide. Please know that your leadership team is working around the clock to find ways to grow our business and welcome back more of our colleagues.\u201d If you get particularly lucky and are recalled to duty before Dec. 31, your seniority will be preserved, MGM promises. Barring an upsurge of end-0f-year tourism, that prospect seems sadly unlikely.<\/p>\n\n\n\n

Chicago<\/strong> Mayor Lori Lightfoot<\/strong> (D) has apparently gone off her dubious idea of putting a Windy City casino in the slums (‘You’re poor and minorities, so we’ll dump it on you.’). She’s giving casino companies until Oct. 21 to pitch gaming palaces<\/a> in the heart of Chi-town. Lightfoot’s minions are promoting it as \u201conce-in-a-generation opportunity for new gaming and entertainment development in the heart of a major American city.\u201d The winner must have \u201cdemonstrated excellence in casino design, development, sustainability and operations, financial stability, accommodation of multi-modal transportation needs and giving back to the community.\u201d (What about diversity?) It will also be able to at least strongly suggest where to put the temporary casino it could operate will building the permanent one.<\/p>\n\n\n\n

However, the city’s request for information<\/a> makes it sound like the casino developer will be the lucky one, not the entrepreneur shouldering a big risk: “Chicago\u2019s GDP of $671 billion is greater than that of Sweden<\/strong>, Poland<\/strong>, or Argentina<\/strong>. In fact, if Chicago were a country, it would be one of the top 25 largest economies in the world. Yet despite these powerful statistics, the City\u2019s gaming market remains untouched.” (Mind you, Sweden, Poland and Argentina are not known for their casino industries.)<\/p>\n\n\n\n

\"\"Lightfoot’s real priority is to “provide much-needed city and state revenues, as well as create well-paying jobs for Chicago residents.\u201d That’s characteristic of the tone of noblesse oblige<\/em> that’s accompanying Chicago’s rollout of an opportunity that has seen no takers to date. Whether austerity-strapped companies will flock to a low-margin\/high-tax (40%) jurisdiction at a time when preservation of liquidity is paramount remains very much to be seen. After all, a constraint on amenities is strongly implied by the city’s demand that supplicants describe how their casino will complement<\/em> existing convention, hotel and sporting venues, implying that Casino X is going to have to make its nut almost strictly off gambling. Casino operators pay almost as much in taxes in Macao<\/strong>, ’tis true, but the Second City is no Macao, where resorts can offer many more bells and whistles. The Chicago RFI speaks vaguely of casino “amenities” and allowing space therefore but is exquisitely vague about what will be OK.<\/p>\n\n\n\n

Lightfoot’s timeline is for a mid-2021 casino award and a 2025 opening. The operator would get rights to slot routes at Midway Airport<\/strong> and O’Hare Airport<\/strong>, for a grand total of 4,000. Ominously, “Lawmakers expect a Chicago casino to send $500 million a year back to the state to spend on non-road infrastructure projects statewide.” That implies an expectation of a $1.25 billion annual gross at a time when Illinois<\/strong> casino revenues are plunging. Lightfoot’s initial, casino-in-the-hood plan would grossed $350 million less, her experts say. No shyte. Her Honor is caught between Gov. J.B. Pritzker<\/strong> (D), who is ruling out McCormick Place<\/strong> and the Loop, and alderman who would like it on the West or South sides of the city. (We still think the old Post Office would be ideal, but nobody’s asking us.) There’s an awful lot of optimism baked into Lightfoot’s numbers but there might be one or two casino companies out there that are crazy enough to rush at this rather than wait for their bottom lines to improve first.<\/p>\n\n\n\n