From now on the Mohegan Tribe of Connecticut, owners of the Mohegan Sun, will only pay themselves out of the profits of their casino.
On New Year’s Day of 2015 the tribe will have completely paid off the longtime relinquishment agreement with its original partners, Trading Cove Associates, who built, developed and marketed the casino in the 1990s.
Fifteen years ago the tribe agreed to buy out Trading Cove by paying 5 percent of the casino’s gross revenues. When the agreement finally comes to an end, the tribe will have paid its former development part over $900 million.
If the tribe had not made that agreement, it would have paid the Trading Cove 40 percent until 2003. Nevertheless the decision by earlier tribal leaders was controversial, and many felt that the terms were overly generous to Trading Cove. However it was felt at the time that the tribe had a small window for expanding against its rival, Foxwoods, which had opened its casino first.
Kevin Brown, chairman of the tribe told the Day, “I can tell you that I and the tribal council are looking forward to the last payment.”
The end of the payments will help the tribe deal with falling revenues that first occurred during the Great Recession in 2008 and have continued. During that period the tribe has seen revenues decline by about 30 percent.
Trading Cove is still in the Indian casino development business; currently with the Stockbridge Munsee Band of Mohicans, who want to build a commercial casino in Sullivan County, New York.
