Saturday, August 22, 2009 1:00 PM EDT
Casino reports another losing quarter
By Christopher Michel
Special to the Olean Times Herald
SALAMANCA - While the United States is making headway toward ending the recession, the powerhouse of the Seneca Nation of Indians’ economy still seems to feel the effects of these difficult financial times.
In Seneca Gaming Corp.’s most recent quarterly filing with the Securities and Exchange Commission, the corporation reported a loss of $82.7 million. The multi-million-dollar losses are part of even bigger write-offs from delayed construction projects, and financial hardships facing many of its customers.
Catherine Walker, chief operating officer for the corporation, said some of the loss “comes from an impairment charge. That is a non-cash charge for delays in our construction projects,” she said. “It’s money that has already been spent, but because of the delays, we had to write it off for accounting reasons.”
Compared to gaming revenues from the same quarter last year, the corporation’s earnings have decreased at two of its three casinos in the most recent quarter, which ended June 30.
According to the SEC filing, the Seneca Niagara Casino lost $12.6 million and the Seneca Allegany Casino lost $4.5 million. The Seneca Buffalo Creek Casino, however, increased its gaming revenues by $1.6 million.
Corporation officials attribute the loss in gaming revenues to the recession and the reduced consumer demand in gaming and entertainment offered at each gambling venue.
The corporation’s SEC filing also stated the gaming corporation’s hold on construction of an additional 200-room hotel at the Allegany facility is still in effect. Similar to the loss in gaming revenues, the corporation cited the recession, inability to obtain construction financing at reasonable interest rates and operating costs as the reasons for the continued delay.
As of the end of the last quarter, the corporation reports spending $18.2 million on the Seneca Allegany expansion project in its current phase of construction.
Corporation officials also stated in the filing there are no immediate plans to resume construction.
Although the report doesn’t paint an entirely positive picture of the corporation’s performance in the last quarter, officials did have some good news for the future of the Buffalo Creek facility.
Like the construction project at the Seneca Allegany Casino, the construction of the permanent casino on the 3-acre parcel of land at Buffalo Creek is still on hold. However, the gaming corporation reported taking a $9 million unsecured loan for the purchase of 250 slot machines. The purchase of the new machines will bring the total number of slot machines available at the facility to nearly 500.
But even in the wake of the substantial losses, Ms. Walker said the company is still on sound financial ground.
“The company is still doing very well, even in this recession. We continue to look forward to improvement in the economy and good results from our properties,” she said. “Our team continues to work every day to make our properties better and improve our operations for our customers.”
EDITORIAL FOOTNOTE; The same kinds of things that are happening at the Mohegan Sun Casino are also happening in other parts of the United States. the Senecas are a prime example of this. Is part of what is happening at the Mohegan Sun partly to blame of the Mohegan Tribal council? What do you think?