Mohegan Sun casino posts two-thirds 1Q profit drop
AP / January 30, 2014
UNCASVILLE, Conn. (AP) — The parent company of the Mohegan Sun casinos in Connecticut and Pennsylvania reported a 36 percent fall in first-quarter profit Thursday, blaming a drop in table game holds, the money brought to the table by players and held by the casino.
The Mohegan Tribal Gaming Authority also said its expenses climbed in the quarter that ended Dec. 31 as it unsuccessfully sought a casino license in Massachusetts and saw a drop in slot revenue due to the continuing weakness in the economy.
However, the tribal authority was cheered by a slight rise in slot wagering at its Connecticut casino, to $1.79 billion from $1.785 billion.
‘‘Our results for the quarter were mixed,’’ Chief Executive Mitchell Etess told investor analysts on a conference call.
In an interview, he discounted the reduced hold and said revenue is ‘‘flattening out’’ after sinking month after month due to the recession, the weak economic recovery and growing casino competition in the Northeast.
‘‘We’re feeling like this is a pretty good quarter,’’ Etess said.
Net income for the quarter was $33.3 million, down from $52.2 million in the same quarter last year. Revenue of $312.8 million was down about 4 percent from the first quarter of 2013.
Table game hold at Mohegan Sun decreased 3 percentage points, to 13.3 percent. The decline primarily reflected an ‘‘abnormally low hold within the high-end table game segment,’’ the tribal authority said. It was among the lowest holds since the Connecticut casino opened in 1996, executives said.
Non-gambling revenue increased, with food and beverage sales posting a 7 percent gain, hotel revenue up 3. 1 percent and retail and entertainment rising by nearly 11 percent.
At the Mohegan Sun at Pocono Downs in Pennsylvania, total slot gambling fell by nearly 8 percent.
In addition, the tribal authority reported $1.2 million in pre-opening costs and expenses related to the opening of its 238-room hotel at Pocono Downs in November and a decline in adjusted earnings before taxes and depreciation.
Mohegan Sun also blamed a ‘‘sluggish regional economic environment’’ in Pennsylvania for disappointing business.
The casino, which narrowly lost a vote in Palmer, Mass., to build a resort casino, announced Tuesday that it struck deals with seven surrounding communities as it pursues a $1.3 billion resort casino on land owned by Suffolk Downs in Revere, Mass.
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