Demolition work for third tribal casino to begin this month

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Mohegan — Demolition work will begin by the end of the month on the East Windsor site of the proposed third Connecticut casino, the Mohegan Tribe's chairman said Thursday during a quarterly conference call with investors and gaming-industry analysts.

Kevin Brown, who also chairs the management board of Mohegan Gaming & Entertainment, Mohegan Sun's parent company, said the Mohegan and Mashantucket Pequot tribes, partners in the third-casino project, are "on track" to proceed with the razing of an abandoned Showcase Cinemas building off Exit 45 of Interstate 91.

There, the tribes intend to build a $300 million "satellite" casino to protect their gaming palaces in southeastern Connecticut from the competitive impact of MGM Springfield, the nearly $1 billion resort casino under construction in Massachusetts.

Brown said "a bit of obfuscation" at the federal level has held things up.

He was referring to the U.S. Department of the Interior's failure to act on gaming amendments Gov. Dannel P. Malloy signed with each of the tribes last summer. The state law that authorized the East Windsor casino requires that the amendments be approved by the federal government. The state and the tribes have sued in an effort to compel the Interior Department to act.

The intrigue was detailed Thursday in an article posted by Politico, the online and print news outlet. Headlined "Zinke's agency held up Indians' casino after MGM lobbying," the article says the Interior Department refused to endorse the state-tribe gaming amendments after Interior Secretary Ryan Zinke and other Interior officials "held numerous meetings and phone calls with MGM lobbyists and the company's Republican supporters in Congress ..."

The reporting, which confirms much of what has appeared in Connecticut media, was based on "a Politico review of Zinke's schedule, lobbying registrations and other documents," the article says.

Mohegan Gaming & Entertainment, which in addition to Mohegan Sun owns and operates Mohegan Sun Pocono in Wilkes-Barre, Pa., and manages casinos in Atlantic City and Washington state, had a strong quarter in the three-month period that ended Dec. 31, MGE executives said during the conference call.

By a measure known as adjusted EBITDA — earnings before interest, income taxes, depreciation and amortization — earnings for the company were up nearly 10 percent over the same quarter the previous year, Mario Kontomerkos, MGE's president and chief executive officer, said.

"Results were led by another strong quarter at our flagship operation, Mohegan Sun," he said.

At the Connecticut casino, adjusted EBITDA increased 12.8 percent, while net revenues totaled nearly $263 million, a 1.4 percent increase.

Kontomerkos reported that the $80 million Mohegan Sun Exposition and Convention Center was on schedule to open this summer and that groundbreaking for MGE's integrated resort development in South Korea should take place by mid-year. Key permits for the Korean project still must be obtained, he said, though "that appears to be imminent."

About a half-dozen major shows, including Barrett-Jackson's annual Northeast auction of collector cars, already have been booked for the convention center, Kontomerkos said.

MGE executives said they couldn't comment on whether the company would seek to acquire additional casino properties or whether it would respond to the expansion of gaming in Pennsylvania.

Kontomerkos also declined to discuss the situation in Massachusetts, where gaming regulators are reviewing the casino license they granted Wynn Resorts, which has been rocked by allegations of sexual misconduct by Steve Wynn, the company's chairman and chief executive officer. Mohegan Sun lost out to Wynn Resorts in the competition for the license several years ago.

Wynn Boston Harbor, a $2.5 billion project under construction in Everett, is scheduled to open in 2019.

b.hallenbeck@theday.com

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