December 6, 2018

Mohegan's 4Q profits plummet amid crowded Northeast gaming market

Photo | Contributed
Photo | Contributed
Mohegan Sun is located in the Uncasville section of Montville.
PHOTO | Contributed
MGM's new $960 million casino in Springfield.

The tribal operator of Mohegan Sun reported a 25 percent decline in fourth-quarter profits due to lower gaming revenues that were challenged by new competition at MGM's Springfield Casino.

For the three months ended Sept. 30, Mohegan Gaming & Entertainment (MGE), which owns Mohegan Sun in the Uncasville section of Montville and another casino in Pennsylvania, said it netted almost $40 million, down about 25 percent vs. the $53.5 million it recorded in the year-ago period.

The net income dip, in part, was due to a 5.2 percent loss in gaming revenues, which fell from $307.1 million to $291.1 million in the fourth quarter. Slot revenues declined 4 percent and table game revenues fell 7.9 percent during the quarter.

Net revenues were $347.2 million compared to $362 million in the fourth quarter last year. That represents a 4.1 percent decline.

Casino officials said Mohegan Sun struggled in September, MGM Springfield's first full month in operation.

For the month, Mohegan Sun's net revenues dipped 3.2 percent and operating income decreased by 22.6 percent.

MGE CEO and President Mario Kontomerkos said revenues fell "in part due to the impact of a recent competitive opening in the Northeast gaming market."

On a positive note, Kontomerkos said MGE during the quarter also acquired certain assets to oversee two casinos in Niagara Falls, Canada.

Tribal operators said it netted $76.4 million for the year, a roughly 4.6 percent drop compared to 2017, when it netted $80.1 million. Both year-end profit totals are far less than the $133 million Mohegan operators netted in 2016.

The bleak fourth quarter and year-end earnings reports come weeks after both Mohegan and Foxwoods Resort Casino each reported a drop in revenue and wagers for the fourth consecutive month in October as MGM Springfield neared the end of its third month in operation.

Mohegan and Foxwoods are expected to announce their gaming revenues for November later next week.

But early earnings reports have not signaled month-over-month growth at MGM Springfield.

The $960 million casino, which opened in late August, posted a 17.6 percent decline in gaming revenues in October compared to its first-full month in September.

Mohegan and Foxwoods are still hopeful they will be able to score federal approval to begin building a proposed $300 million entertainment complex in East Windsor to remain competitive in the central and northern portions of Connecticut.

But the proposed development is in doubt as Department of Interior Secretary Ryan Zinke has refused to approve the plans, which are plotted off tribal land. Zinke's decision, according to multiple news reports, is under investigation as Foxwoods' tribal operators have argued he gave into political pressures to block the project.

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