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    Thursday, April 25, 2024

    Mohegan Sun revenue, profit was down in last three months of 2016

    Mohegan — Gamblers cut into Mohegan Sun’s revenue in the quarter that ended Dec. 31, causing year-over-year declines in the parent company’s revenue and profit, the Mohegan Tribal Gaming Authority reported Wednesday.

    The authority’s net revenue for the period — the first three months of its 2017 fiscal year — totaled $331 million, down slightly from the $333.2 million the authority reported for the same quarter the previous year.

    The authority reported a net loss of $51.6 million for the quarter.

    Despite the downturn, MTGA executives who spoke during a conference call with investors and gaming analysts said they were encouraged by both the gaming and nongaming business “volumes” at the authority’s casinos.

    In addition to Mohegan Sun, the authority operates Mohegan Sun Pocono in Wilkes-Barre, Pa., and is involved in other gaming ventures that are in place or being developed in Atlantic City, Washington state, Louisiana and South Korea.

    Bobby Soper, the authority’s president and chief executive officer, said the lower-than-expected table games revenue at Mohegan Sun was the result of a significantly lower “hold” percentage, meaning the amount of wagers kept by the casino. Put another way, gamblers won more than they typically do. Over short periods, hold percentages can vary widely.

    The authority estimated that the year-over-year decline in the table games hold percentage during the quarter accounted for a $14 million decrease in table games revenue.

    “You never look at one quarter of hold,” Soper said. “What was promising from our perspective was that volumes continued to be strong.”

    He noted that while Mohegan Sun’s gaming revenue (including slots) was down 1.1 percent in the quarter, the casino’s nongaming revenue was up by 18.2 percent. Mohegan Sun’s new Earth Tower hotel, which opened in November, was responsible for some of the surge.

    Mario Kontomerkos, the authority’s chief financial officer, told investors the hotel has exceeded expectations, posting an occupancy rate in the low 90s.

    During the quarter, Mohegan Sun celebrated its 20th anniversary and Mohegan Sun Pocono marked 10 years of operation.

    Authority executives also reported that the casino the MTGA is developing in a partnership with the Cowlitz Indian Tribe in La Center, Wash., is “on time and on budget.” About 80 percent complete, it is scheduled to open in late spring.

    Kontomerkos said revenues were up in December at Resorts Casino Hotel, the Atlantic City property the authority manages and owns a stake in and that the Paragon Casino Resort it manages in Marksville, La., provided $525,000 in fees during the quarter.

    Soper reported that the MTGA-led partnership pursuing a resort at the Incheon International Airport near Seoul, South Korea, expects to start construction late this year or early next year.

    The authority also has proposed redeveloping the former Norwich Hospital property in Preston, a project it would pursue by attracting third-party developers.

    “I wouldn’t expect any significant capital expenditure by us,” Kontomerkos said.

    In regard to the Mohegan Tribe’s efforts to develop a Connecticut casino in a joint venture with the Mashantucket Pequot Tribe, Kevin Brown, chairman of both the Mohegan Tribal Council and the MTGA management board, said the tribes are turning their attention to the state legislature, which would have to authorize the project.

    “We’ve had some success in the communities,” Brown said, referring to East Windsor and Windsor Locks, where the tribes held public meetings last week. “The towns are excited about it.”

    b.hallenbeck@theday.com

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