Mohegan Sun revenue falls 40 percent in 2nd quarter

Mohegan Sun revenue falls 40 percent in 2nd quarter
Joe Amarante, Register Staff
05/01/2012

UNCASVILLE — The parent company of Mohegan Sun Casino Tuesday reported a 40 percent drop in second quarter fiscal 2011 net income.

In a conference call about the quarter that ended March 31, officials celebrated the March refinancing of the company’s debt and looked forward to the Sun’s new casino-floor slots changeover that will officially begin Memorial Day weekend.

The Mohegan Tribal Gaming Authority, which also operates the Mohegan Sun at Pocono Downs in Wilkes-Barre, Pa., said net income was $15.1 million, a 40.1 percent decrease from the second quarter of fiscal 2011, but that it had “successfully completed a comprehensive refinancing of its outstanding debt” in March, and that cash flow (referred to as EBITDA, or earnings before interest, taxes, depreciation and amortization) was up 6.4 percent, to $85 million.

We are quite pleased with our results for the quarter,” said Mitchell Grossinger Etess, chief executive officer of the authority.

Though net income was down, income from operations was up 10.5 percent, officials said. Gross slot machine revenues fell 1.7 percent, but table game revenue rose 4.5 percent.

Visitors this winter may have noticed many slot machines out of order or being retrofitted with Bally Technologies kits. That’s because Mohegan Sun is on the verge of unveiling what it calls “one of the largest changeovers to an existing casino floor in the history of the gaming industry.”

The casino will roll out PowerPlay Bonusing (in collaboration with Bally), a that features something called IView Display Manager and Elite Bonusing Suite.

The new programming on most of the 6,000 slots will allow real-time rewards and promotions that include slot tournaments, virtual racing (you pick a horse, for example) and wheel promotions, along with access to property information, such as restaurants and entertainment.

“This Saturday, we’re going to have our first race in conjunction with the Kentucky Derby,” said President and Chief Executive Officer Jeff Hartmann. “It’s a game within a game. It’s kind of a window in the video slot machines, and for the traditional reel machines, it’s a separate smaller window. You’re awarded different prizes or slot play if you’re a winner.”

Also from the tribal authority conference call:

♦ Officials said they had eliminated some “unprofitable machines from the floor” and were trying to be “smart in our use of free slot play” because it reduces profit for the company.

They said they cut promotional free slot play by 11.4 percent while a nearby competitor (Foxwoods) increased it by 17 percent.

♦ There have been fewer headliners at the Arena so far this year (due to availability of big acts), which has led to lower slot and table results, and one top official said that “spend-per-trip is not back to pre-recession levels.”

♦ The winter’s mild weather actually helped revenues to the tune of several million dollars, it was estimated.

♦ The mix of Mohegan customers breaks down to: 43-47 percent from Connecticut, 20-22 percent from New York, 18-20 percent from Massachusetts, 7 percent from Rhode Island and the balance from New Jersey and New Hampshire.

♦ Now that refinancing is done, officials will again look at the need for new hotel rooms at Mohegan (75 percent are occupied by players using casino points), which presumably would mean the first expansion in several years.

♦ Casino officials are having ongoing discussions about online poker with “potential vendors, on the political level” and with “potential partners,” but it’s unknown if regulatory control will be with state or federal authorities.