In Foxwoods Resort Casino’s annual report for the 2014 fiscal year ending September 30, Deloitte & Touche LLP auditors wrote the casino’s current financial situation “raises substantial doubt” about its future operations. Owned by the Mashantucket Pequot Tribe and located in Mashantucket, Connecticut, Foxwoods reported net revenue of 0.1 million for 2014, a drop of 7.7 percent from .04 billion the previous year.
Also in 2014 Foxwoods defaulted on the terms of a $1.7 billion debt-restructuring. It also negotiated a “forbearance agreement” with its senior lenders which, if it is not extended beyond the current expiration date of June 30, 2015, and if the lenders “were to exercise certain default-related remedies, those circumstances would negatively impact the operations of the enterprise. These matters raise substantial doubt about the enterprise’s ability to continue as a going concern,” auditors wrote.
They noted, “The enterprise continues to invest in its business and to reduce operating costs to potentially improve its financial performance. Absent either an extension of the forbearance agreement or a refinancing or restructuring of the tribe’s debt obligations, present cash flows of the enterprise, while positive, plus available cash balances are not sufficient to liquidate all of the tribe’s debt if called by the lenders.”
Foxwoods’ 2013 restructuring addressed the Mashantuckets’ 2009 default on $2.3 billion in debt.
In addition, Mohegan Sun in Uncasville, operated by the Mohegan Tribal Gaming Authority, also reported a decline of 4.5 percent in net revenue from $1.04 billion in 2013 to $995.1 million in 2014.
Revenues have been falling at both Foxwoods and Mohegan Sun, whose revenues have been declining for several years. The operations blame recent losses on the weak regional economic recovery and competition from other gaming facilities in the Northeast.
Mohegan Tribal Gaming Authority Chief Executive Officer Mitchell Etess said, “Last year was challenging. We were ‘blessed’ with incredibly bad weather, and we had low table-games. On a corporate level, there were a lot of costs associated with Massachusetts. Overall, we think things are heading in the right direction. The last quarter last year and the quarter we’re in have been good.” Last year the Gaming Authority proposed a $1.1 billion Revere casino project for the greater Boston area, but Wynn Resorts’ Everett casino won the license.
