Mohegan gaming authority increases profit percentage
by William Sokolic
By almost any measure, the first quarter results for the Mohegan Tribal Gaming Authority were not good.
Net revenue, gaming revenue, gross slot and table game revenue and nongaming revenue all fell for the quarter that ended Dec. 31.
But the adjusted Earnings Before Interest, Taxes, Depreciation and Amortization — a measure of profitability — rose 18.7 percent compared to 15.2 percent in the first quarter of fiscal year 2009. The measurement reflects lower operating costs and expenses, part of cost containment started during the second quarter.
“We continue to be challenged by reduced spending per patron, especially at Mohegan Sun. People are coming out, but spending less money when they’re here,” CEO Mitchell Etess said. Some other positives:
• The casino had a table game hold of 14.4 percent vs. 13.7 percent the prior year.
• Hotel occupancy averaged 93 percent, but revenue declined from lower room rates because of competition from Foxwoods and Atlantic City.
• Group room occupancy rose 17.3 percent.
“That was an encouraging trend,” said Jeff Hartmann, chief operating officer. “And last month, we saw some good increases in table games.”
The most significant achievement was the October issuance of $200 million in notes used to repay outstanding debt.
In September 2008, the authority suspended a hotel, retail and parking garage addition because of a slowdown in business and uncertainties in the financial markets. The agency provided information on when or if the project will resume.
“We’re evaluating options,” Hartmann said.
Business at Pocono Downs increased and the future should improve even more with the introduction of table games. The company, spending $17.9 million on training and pre-opening costs, filed a petition last week for approval from the Pennsylvania Gaming Control Board, with a hearing slated for Feb. 24.
Negotiations are under way to structure a deal for a 300-room hotel on six acres.
Mohegan Sun is in a holding pattern on expanding into Massachusetts, waiting for the legislature to act. The tribe is still in talking with the Cowlitz Tribe to develop a casino on 152-acres in Washington state.
Copyright 2010 Norwich Bulletin. Some rights reserved
COMMENT FROM NORWICH BULLETIN READER
The powers to be at the Mohegan Sun that are in charge of paying consultants need to re-evaluate how existing consultants and contractors are arbitrarily given work. Any new development projects should be formally bid through a 'sealed bid' process. Existing consultants and contractors have continually been given work because of the 'buddy' relationships that exist between consultants and the Moheagn sun employee in charge of 'selecting' the consultants. There is a real cozy relationship between certain MS employees and a certain consultant. Even thought he Mohegan Sun has a policy to get 'quotes' for design related work, the process is cleverly de-railed with 'excuses' to foster the re-hiring of the consultant. One professional consultant in particular bragged about the HUGE profit made at the expense of the Mohegan Sun despite their project screw ups and referred to the Mohegan Sun as the 'Goose that lays the golden eggs!' Mrs. Malerba - pay attention to this and you will be a hero!!
EDITORIAL FOOTNOTE: No matter how you cut it, business is bad and the Mohegan Tribal Gaming Authority isn't getting the job done for the Mohegan Tribe and it's employees. What do you think?