Mohegan Gaming says quarterly revenue decline in line with expectations
Mohegan — Mohegan Sun’s net revenue declined by 7.4 percent in the quarter that ended March 31, the casino’s parent company, Mohegan Gaming & Entertainment, announced Thursday.
By another measure, adjusted earnings before interest, income taxes, depreciation and amortization, or EBITDA, Mohegan Sun was down 22.6 percent.
The parent company, which also owns Mohegan Sun Pocono in Wilkes-Barre, Pa., and manages casinos in Atlantic City, N.J., Louisiana and Washington state, reported that its overall net revenue for the quarter, $307.7 million, was down 6.3 percent over the same period last year. EBITDA was down 15.4 percent.
In a conference call with gaming analysts, Mario Kontomerkos, MGE’s chief executive officer, said the results were in line with expectations and reflect the effects of new competition and “an unusually low table hold” at the company’s Connecticut and Pennsylvania properties. Hold, the amount of table-games wagers a casino keeps after paying prizes, can drastically fluctuate from quarter to quarter.
“At the same time, nongaming results continue to be healthy and remain a driving factor for our growth at Mohegan Sun,” Kontomerkos said.
Mohegan Sun’s net revenue for the quarter totaled $238.4 million, of which $159.8 million, or 67 percent, came from gaming.
It was the second full quarter in which Mohegan Sun felt the impact of MGM Springfield, the western Massachusetts resort casino that opened last fall. In anticipation of the new competition, Mohegan Sun launched a series of initiatives aimed at containing costs and increasing revenues, including closing the Casino of the Wind, a gaming area that used to house a poker room.
“It was an underutilized space,” Ray Pineault, Mohegan Sun’s president and general manager, said of the area. “The poker room was misplaced there. We’ve moved it into the Hall of the Lost Tribes (in the Casino of the Earth), where it’s closer to parking. We’ve moved a lot of the slot machines and table games to other areas, a process that’s still going on.”
Pineault said Mohegan Sun expects to operate between 4,200 and 4,400 slots when the moves are completed. He said plans for the Casino of the Wind space have not been finalized.
The casino also has expanded its comedy club in the Casino of the Earth, rechristening it Comix Roadhouse and adding a restaurant/bar, live country music and a mechanical bull. On tap is Novelle, a 15,000-square-foot nightclub with a dance floor and private rooms that’s scheduled to open next month near Michael Jordan’s Steak House.
Game On, a 23,000-square-foot area encompassing a bar, a restaurant, an eight-lane bowling alley and a variety of other games and activities, also is due next month in the Earth Expo & Convention Center, which is set to host Barrett-Jackson’s fourth annual Northeast Auction of collector cars June 26-29.
While quarterly revenues were down 8.1 percent at Mohegan Sun Pocono, MGE’s corporate division made some sizable gains.
“Outside of the Northeast, cash flows from our managed portfolio grew strongly, up 86 percent year over year,” Kontomerkos said. “Looking ahead, in June we expect to assume operational control of two major Niagara Falls, Canada, assets, which will mark the first international operations for MGE and will provide increased earnings and cash-flow diversity for our stakeholders.”
MGE also has begun building the first phase of Project Inspire, an integrated resort in Incheon, South Korea, which is scheduled to open in 2022.
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