Mohegans report gaming profits double in latest quarter
Mohegan — The Mohegan Tribal Gaming Authority reported Wednesday profits of $28.1 million in its third fiscal quarter of the year, more than double what it made in the same period last year.
The operator of the Mohegan Sun said improved results primarily came from reductions in corporate expenses combined with improved revenues at the Uncasville casino’s slot machines and better results at table games within its Pocono property.
"We were extremely pleased with our results," said Mitchell Etess, longtime chief executive of the gaming authority who announced late last year that he is stepping aside and passing the torch of leadership later this year to Robert J. "Bobby" Soper, chief executive of the Mohegan Sun.
Among the highlights of the most recent financials was a 2.8 percent increase in slot revenues — the first increase in third-quarter slot revenues in nearly a decade, according to Soper. He said this was a "remarkable feat" because of a more than 20 percent decline in free slot play, reflecting efforts to provide more incentives to its best customers and be "more efficient" with others.
Mario Kontomerkos, chief financial officer of the Mohegan Sun, pointed out that higher profits were allowing the gaming authority to pay off more of its debt. In fact, total debt outstanding has declined to the lowest level since March 2008, according to Soper.
"We anticipate that this trend will continue," he added in a statement.
Kontomerkos said the authority’s debt of $1.63 billion was down more than $100 million from the previous year. He said the authority plans to redeem high-interest notes with some regularity, using mostly cash from operations as its financial position allows.
Adding to the positive news was the revelation that the quarter ending in June was the first time in 15 years that the authority was not required to hand out so-called relinquishment payments to Trading Cove Associates, which managed Mohegan Sun in its early years.
The payments, totaling well over half a billion dollars during the period, went to the company headed by South African casino mogul Sol Kerzner and local businessman Len Wolman, head of The Waterford Hotel Group. As casino revenues dipped during the Great Recession, payments totaling 5 percent of gross revenues became a burden on the gaming authority, with Trading Cove for a time earning more from its deal than the casino operator.
The gaming authority’s payment to the Mohegan tribe was $12.5 million for the quarter, which keeps it on target for a full-year payment of $50 million.
l.howard@theday.com
Twitter: @KingstonLeeHow
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