Casino operator Mohegan Gaming and Entertainment has announced adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$88.2 million for its financial third quarter ended June 30. That represented a decrease of 1.2 percent in year-on-year terms for the company known as Mohegan Sun and based in the state of Connecticut, in the United States.
Mohegan Sun issued a written statement on Wednesday that blamed the modest decline in EBITDA on shrinking group revenue and increases in slot machine taxes in the U.S. state of Pennsylvania. The company says third-quarter net revenue fell by 1.5 percent to US$344.9 million.
Gaming revenue fell by 0.5 percent to US$295.4 million, as gross revenue from slot machines decreased by 0.9 percent to US$203.6 million, and revenue from table games dropped by 3.8 percent to US$91.6 million. Non-gaming revenue fell by 10.2 percent to US$74.1 million.
Mohengan Sun attributed the decline in net revenue to the reduction in non-gaming revenue and continued increases in promotional activity around the Mohegan Sun Pocono in Pennsylvania. Third-quarter operating expenses were similar to a year earlier, the company stated.
“Overall fiscal third-quarter results were generally in line with prior-year performance, driven by effective operational cost containment initiatives leading to an impressive margin performance at Mohegan Sun in Connecticut,” said Mohegan Sun chief executive Mario Kontomerkos.
“We continue to make progress on several development efforts in North America, South Korea and broader Asia, in order to diversify and strengthen our revenue sources and credit profile, and to ensure the continued long-term success of MGE.”
In South Korea, Mohegan Sun is building a casino resort next to Incheon International Airport, spending US$1.6 billion on the first phase, which is due to open in 2021. The resort, to be called Inspire, will have a 15,000-seat indoor entertainment arena, three hotels containing 1,000 rooms, more than 11,000 square metres (118,400 sq feet) of events space, shops and a casino with a floor area greater than 25,000 square metres, which will be open to all except South Koreans.
The company said it expects development near the Incheon airport could create an international entertainment district that can compliment Macau and Las Vegas, Nevada – particularly when it comes to accommodating players from mainland China.
In May, Mohegan Sun said it reached an “amicable” agreement to buy out its local partner in the South Korea project. At the time, Mr Kontomerkos said the deal would give Mohegan Sun full ownership and further “diversification efforts in Asia, the world’s fastest-growing major gaming and entertainment market”.
Among the other investors around Incheon are Caesars Entertainment Corp, which is also building its first Asian casino resort for about US$750 million. Mainland Chinese property developer LongRunn International Group is reportedly planning a project called Diamond City and is prepared to invest more than US$4 billion; and Philippines-based casino operator Bloomberry Resorts Corp has a 12.2-hectare plot in the area and has said it plans to develop two properties close to the airport.
Incheon’s airport serves as the main air transport hub for Seoul and handled more than 62 million passenger journeys last year, including 6.4 million transit journeys, according to data on the airport’s website.
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”We committed to the government to provide a full business idea and plan for Phase 1b around 12 months after the casino opens, therefore, probably early 2025”
President of the Mohegan Inspire Entertainment Resort in South Korea