Casinos' revenues were down in fiscal 2019, annual reports show
Foxwoods Resort Casino and Mohegan Sun experienced declines in net revenues in the fiscal year that ended Sept. 30, 2019, though Mohegan Sun’s ever-expanding parent company posted overall gains, annual reports filed in late December show.
During the period, the southeastern Connecticut casinos faced new competition from gaming operations in Massachusetts and Rhode Island, which became the first New England state to offer legal sports betting in November 2018. New Hampshire followed suit this week.
Mohegan Sun’s net revenues for the fiscal year were $992 million, down 7.2 percent over the $1.07 billion it took in the previous fiscal year. Its parent, Mohegan Gaming & Entertainment, which also owns and/or operates casinos around the country and in Niagara Falls, Ontario, Canada, had overall net revenues of $1.39 billion, a 2.4 percent increase over the $1.36 billion the company reported a year ago.
Foxwoods’ net revenues were $787.8 million, down 5 percent from $828.9 million. A year ago, both Foxwoods and Mohegan Sun reported smaller year-over-year declines in net revenues for fiscal 2018.
According to Mohegan Gaming & Entertainment’s annual report, posted on the website of the U.S. Securities and Exchange Commission, Mohegan Sun's results were driven by lower gaming revenues, which were partially offset by higher nongaming revenues. A strong entertainment calendar “featuring additional headliner shows” and traffic generated by events held in the casino’s Earth Expo & Convention Center, which opened in June 2018, were cited in the report.
MGE’s “Connecticut operations” also include the Mohegan Sun Golf Club in Baltic and the Mohegan Tribe’s two professional sports franchises: the Connecticut Sun of the Women’s National Basketball Association and the New England Black Wolves of the National Lacrosse League.
While net revenues declined by 5.5 percent at Mohegan Sun Pocono, MGE’s casino in Wilkes-Barre, Pa., the company’s balance sheet got a boost from its June acquisition of the “Niagara Resorts” — the Fallsview Casino Resort, Casino Niagara and the future Niagara Falls Entertainment Centre, all in Niagara Falls, Ontario. The properties generated $112.5 million in net revenues in the fiscal year.
Foxwoods’ annual report, posted on the website of the Electronic Municipal Market Access system, shows the Mashantucket Pequot-owned casino’s net revenue declines can be attributed to a decrease in gaming revenue. The report cites the impact of two resort casinos in Massachusetts: MGM Springfield, which opened in August 2018, and Encore Boston Harbor, which opened this past June.
Both of the casino-owning tribes carried “substantial” debt loads approaching $2 billion and both continued to shrink their casino workforces, according to the annual reports.
The Mashantuckets, who have been operating Foxwoods under a forbearance agreement with lenders since defaulting in 2014 on the terms of a debt-restructuring agreement, repaid a $3.25 million loan in November, after the Sept. 30 close of the fiscal year. The payment wasn’t due until June 30, 2020.
MGE reported that as of Sept. 30, Mohegan Sun had about 4,500 full-time employees and 2,000 seasonal, part-time and on-call employees, none of whom is affiliated with a labor union. A year earlier, Mohegan Sun had about 4,810 full-timers and 2,140 part-timers.
As of Sept. 30, Foxwoods employed about 5,144 full- and part-time workers, down from about 5,700 the previous year. The casino trimmed its payroll costs, excluding severance, by $9.9 million, or 3.4 percent. Four groups of Foxwoods employees are affiliated with unions, the largest being the more than 1,000 table games dealers represented by Local 2121 of the United Auto Workers.
Local 2121’s latest contract was set to expire Tuesday. The Day’s attempts to learn the status of talks regarding a new contract have been unsuccessful. Foxwoods indicated it would not comment on contract talks and union officials did not respond this week to a request for information.
The terms of the last contract are to remain in effect while a new contract is being negotiated.
MGE’s report reveals the pay of its top executive officers, led by Mario Kontomerkos, the chief executive officer, whose compensation in the fiscal year totaled $1,050,539. As required by SEC rules, the report compares Kontomerkos’ compensation to that of the company’s “median employee.” MGE calculated the median employee’s compensation was $24,690, resulting in a ratio of the CEO’s pay to the median employee’s pay of 43 to 1.
In fiscal 2018, during which Kontomerkos received a cash bonus, the ratio of his pay to the median employee’s pay was 63 to 1. None of MGE’s top executives received bonuses in fiscal year 2019.
Foxwoods does not list executive compensation in its report.
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