Mohegans' pioneering approach leads down international path
Mohegan — Over the past quarter-century, the Mohegan Tribe has developed a penchant for breaking new ground.
In 1994, two years before Mohegan Sun opened, it became the first U.S. tribe to pursue Wall Street financing for a casino project. In the decade that followed, it became the first tribe to own a professional sports franchise and, in an agreement with a tribe in the Pacific Northwest, the first to sign a deal to manage another tribe’s casino. In 2006, it became the first tribe to own and operate a commercial casino — Mohegan Sun Pocono in Wilkes-Barre, Pa. — and, in 2012, the first to manage a commercial casino — Resorts Casino Hotel in Atlantic City.
And then Mohegan Gaming & Entertainment, the tribe’s gaming company, turned its attention to international opportunities.
In 2016, it won a license to develop an integrated resort in Incheon, South Korea, an ambitious, $5 billion project whose first phase, carrying a $1.6 billion price tag, has been under construction since May and is now scheduled for an early 2022 opening. By the time the $1.2 billion second phase is underway, MGE also could be moving forward with a plan to develop an integrated resort casino in Athens, Greece, as part of the proposed transformation of the former Hellinikon airport property in the southern European country’s capital city.
The overall project, touted in some circles as Greece’s economic salvation, involves a total investment of about $9 billion.
In recent interviews at the Mohegan offices on Crow Hill Road, MGE executives discussed the chances of MGE winning the license to develop the integrated resort portion of the Hellinikon project. Mario Kontomerkos, MGE’s chief executive officer, said Greece’s minister of development told local media the decision would be announced in early December.
MGE’s competition in Greece is Hard Rock International, owned by the Seminole Tribe of Florida, the only other applicant to file a submission by the Oct. 4 deadline.
At that time, MGE unveiled plans for Inspire Athens, including a two-tower design inspired by the Caryatids — the sculpted female figures that support the Parthenon, the ancient temple atop the Acropolis of Athens. The proposal calls for a luxury hotel, entertainment venues, a convention center and retail, dining and gambling spaces. While MGE has not disclosed the cost of the project, it’s been reported that the Greek government expects the figure to be about $1 billion.
Chuck Bunnell, the Mohegans’ chief of staff, said MGE’s presentation evoked an emotional response among some of the Greek officials in attendance. He speculated that Kontomerkos’s ability to field questions in fluent Greek could help MGE’s chances of winning the license. Kontomerkos’s parents emigrated from Greece in the 1960s.
“It’s much more important to have local, Greek partners,” Kontomerkos said, downplaying the role his heritage might play. MGE combined with a Greek conglomerate to pursue the license.
Destined to be the largest waterfront development in Europe’s history, the importance of the Hellinikon project hardly can be overstated.
“It’s the No. 1 project for the government of Greece,” Kontomerkos said, noting that Athens accounts for more than a third of the Greek economy. “You change the trajectory of the city, you change the trajectory of the country.”
MGE’s international ambitions also have incorporated Japan, though recent events there have fueled uncertainty about the prospects.
After reports Thursday that government officials in Hokkaido, Japan’s northernmost island, may decide against licensing an integrated resort, Kontomerkos said any discussion of MGE’s efforts in Japan “would be extremely speculative at this point.”
MGE had planned to propose a project for the city of Tomakomai, a winter resort destination in Hokkaido, partnering with a consortium willing to invest between $3 billion and $4 billion.
Local citizens have opposed such development, citing environmental concerns.
James Gessner Jr., who chairs the Mohegan Tribal Council as well as MGE’s management board, said MGE has opted to pass up potential opportunities in a number of other countries, including in the Caribbean, the Philippines, Brazil, Vietnam and Thailand.
“We focus on places that are going to move the needle,” he said, citing the huge potential of such projects as the one in South Korea and the one proposed for Greece, which provide access to customer bases in the tens of millions of people.
“Connectivity” also is a consideration, Kontomerkos said. “Is it a location our guests here will want to visit?”
Mohegan Sun regulars earn loyalty-program points that can be redeemed at other MGE properties. Kontomerkos noted that Korean residents form one of the largest foreign contingents of visitors to Niagara Falls, the most recent addition to MGE’s portfolio.
In June, MGE officially became an international operator when it took over the day-to-day operation of two casinos in Niagara Falls, Ontario, Canada, in a deal that also includes a 5,000-seat theater under construction there. MGE spent nearly $300 million in acquiring the Niagara Falls properties and owns everything but the real estate, which it leases, according to Kontomerkos. The two gaming facilities — Casino Niagara and Fallsview Casino Resort — generate more than $400 million in annual revenues.
MGE’s international expansion has come on the heels of a series of domestic setbacks, the most stinging of which was its failed bid for the coveted Boston-area gaming license in 2014. MGE also proposed projects without success in western Massachusetts, New York and Pennsylvania.
But after the Massachusetts Gaming Commission chose Wynn Resorts’ proposal for Everett, Mass., over Mohegan Sun’s plan for the city of Revere, MGE’s phones started ringing, the MGE executives said. Interests in South Korea were on the other end of one such call.
“The world was watching, and people really liked how we stood up against Wynn,” Kontomerkos said.
With revenues at the Massachusetts casinos — MGM Springfield and Wynn’s Encore Boston Harbor — falling short of projections, the MGE brand may be looking better by comparison.
“Mohegan does not overpromise and underdeliver,” Bunnell, the chief of staff, said.
“We learned from what we did here,” Gessner added, referring to Mohegan Sun in Uncasville. “The management board said, ‘Let’s take what we have now in Pennsylvania, Atlantic City, Louisiana and Washington state and take it to other countries.’ In everything we do, we take care of our tribal members first ...”
Kontomerkos said MGE’s evolution — the company was previously known as the Mohegan Tribal Gaming Authority — parallels that of the integrated-resort concept, which Kontomerkos defined as the seamless integration of gaming and nongaming amenities under one roof. At Mohegan Sun, the process began with the casino's 2001 expansion, which added a retail concourse, an arena, a 1,200-room hotel and convention space.
“Mohegan is cutting edge with that concept,” Gessner said. “We have things that look like they were meant to be. Game On (one of Mohegan Sun’s newest nongaming amenities) looks like it was part of the master plan.”
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