The Mohegan Sun has suffered a significant decline in profits since the $970 million MGM Springfield opened in August in neighboring Massachusetts. But so have other properties operated by the tribal authority, Mohegan Gaming & Entertainment, that operates casinos not only in Connecticut but in Pennsylvania.
The tribal authority saw profits decline by more than 25 percent for the fourth quarter. The authority’s fiscal year begins October 1.
MGE’s net income for that quarter was $39.7 million, compared to $53.6 million the year before.
The Mohegan Sun’s net revenue for that quarter was $275 million, 3 percent lower than the $284 million a year ago.
The revenue decline also includes the effects of the rising costs of health care, according to MGE President and CEO Mario Kontomerkos. However, the CEO indicated that the news was better than expected. “Early returns from the addition of new competition in the New England market is in line to better than originally anticipated,” he said during a conference call with analysts. “MGE remains committed to the significant operational profit enhancement plan that we outlined at our investor day just a couple of months ago.”
That plan will not require cutting jobs, he added.
MGM is making an even stronger play for patrons in Connecticut by offering a new door-to-door bus service in both states. The cost is $20 for a round trip from Greater Springfield and $30 for longer trips. Passengers get free slot play and a $10 gift certificate good for food at the South End Market.
The Mohegan and Pequot tribes have always looked on their proposed third casino in East Windsor as a string in their bow to blunt the effects of the MGM Springfield on their casino profits. However, that plan was effectively neutered after MGM used its influence to prevent the Department of the Interior from giving the approvals to amendments to the state tribal gaming compacts both tribes need to operate that satellite casino.
A Connecticut lawmaker, Senator Cathy Osten, hopes to change that landscape by introducing a bill that would remove the requirement that the Interior Department approve of the amendments. She urges a quick passage and signature by incoming Governor Ned Lamont. The legislature convenes January 9.
Last year the legislature passed a bill enabling the third casino, but to protect the state’s interests, included the provision that the amendments to the compacts be approved by the department. The department approved of the Mohegan tribe’s amendment, but not that of the Mashantucket Pequots.
Andrew Doba, spokesman of MMCT Venture, the joint tribal authority, greeted the bill’s introduction: “This bill would make right something that should have been done long ago in D.C.,” he said. “The tribes want nothing more than to continue their partnership with the state. We’re grateful to the delegation for their ongoing support and look forward to working with them in the coming session.”
MGM said in a statement: “The proposed bill shows a lack of understanding of the significant risk to Connecticut that would result under Federal law.” MGM argues that if the tribes are allowed to build a commercial casino that they would, in effect, be competing against themselves and would thus void their gaming compacts.
State Attorney General George Jepsen has in the past warned of this possibility, which was why lawmakers included the requirement that the federal government bless the amendments to the pacts.
The state and tribes sued the federal government to force it to act on the amendments, but the suit was thrown out of federal court.
