Mohegan authority 'refocusing' future expansion efforts
Mohegan - Despite recent blows to its expansion efforts, the Mohegan Tribal Gaming Authority wants to keep pursuing projects.
"Probably a more controlled way for us to expand is to look at things we can purchase, either ourselves or with partners," Mitchell Etess, the authority's chief executive officer, said Thursday following a conference call with financial analysts. "We're refocusing our resources away from hearings and presentations and into analyzing opportunities. We're not letting these recent disappointments inhibit our efforts or our enthusiasm."
On Tuesday, a partnership involving the authority failed to win a casino license issued for Philadelphia. In September, the authority's plan to build a $1.1 billion resort in Revere, Mass., was dashed when Massachusetts gaming regulators awarded the sole Greater Boston casino license to Wynn Resorts.
The authority still hopes to win a license for a project it has proposed in New York state's Catskills region. And, officials said, the authority could soon proceed with a $120 million, 400-room hotel project at Mohegan Sun in Uncasville, as well as an Indian casino project in Washington state, where it's partnered with the Cowlitz Tribe.
Hotel construction is set to begin early next year, pending the completion of a financing agreement between the authority and the Mohegan Tribe. When the hotel is completed, the tribe will lease it to the authority, Mario Kontomerkos, the authority's chief financial officer, said. The hotel will be attached to Mohegan Sun in the vicinity of its Winter Casino and Winter Garage areas.
Authority officials said the long-dormant Cowlitz casino project got a boost late last month when the federal government announced it will take into trust for the tribe a 152-acre reservation near La Center, Wash. Once the land transaction takes place, the Mohegan authority can begin designing the proposed casino. Kontomerkos said the authority has made a substantial investment in the land and plans no additional capital outlay in the project.
With revenue declines shrinking and "operating efficiencies" holding down costs, the authority's results for the quarter that ended Sept. 30 "are certainly encouraging," Etess told analysts on the conference call.
The authority reported that its adjusted EBITDA for the quarter - earnings before interest, income taxes, depreciation and amortization - was $77.2 million, virtually the same as it was in the same quarter last year. Income from operations totaled $57.6 million, an increase of eight-tenths of a percent.
Net revenues of $338.6 million were down 2.0 percent. Gaming revenues of $297.3 million were down 2.4 percent, while nongaming revenues of $67.7 million were up less than 1 percent.
Net income, or profit, during the quarter totaled $23.1 million.
Kevin Brown, the Mohegan tribal chairman, responded during the call to a question about the prospect of the Mohegan and Mashantucket Pequot tribes pursuing a joint gaming venture in northern Connecticut. The idea has been floated as a way to protect the state's share of the casinos' gaming revenues from the impact of a Springfield, Mass., casino that's expected to open in 2017 or 2018. Brown said there was currently no "joint venture," between the tribes, but that they have a joint interest in protecting the revenues that Massachusetts casinos are expected to siphon from Mohegan Sun and the Mashantuckets' Foxwoods Resort Casino.