Tuesday, May 27, 2008

Casino Of Wind Slot Machines Reduced By 19%

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As recently as February, the tribe announced that the 45,000 square foot Casino of the Wind that is to open this Fall would include 826 slot machines but that number has since been reduced to 670 slot machines, according to the Mohegan Tribal Gaming Authority's most recent filing with the Securities Exchange Commission (SEC).

A casino executive said the final number slot machines should be 670 slots plus or minus up to five machines.

According to the MTGA filing, the Casino of the Wind will be a "gaming area adjacent to the Casino of the Sky, which is expected to include approximately 45,000 square feet of gaming space with approximately 670 slot machines, 28 table games and a themed poker room with 42 tables, as well as approximately 20,000 square feet of new dining and retail amenities, including a two-level, 16,000-square-foot Jimmy Buffett’s Margaritaville Restaurant and the return of Chief’s Deli, a casual dining restaurant which we will operate. Groundbreaking for the Casino of the Wind occurred in June 2007, and the new casino is scheduled to open in the fall of 2008. The estimated cost of the Casino of the Wind is $125.0 million."

The description of the Casino of the Wind is identical to a February 14th SEC filing except for the number of slot machines. A casino executive said that the reduction in slot machines from previous plans was due to eliminating planned slot machines from the Earth Food Court. It isn't clear that the earlier planned slot machines in the Earth Food Court could be considered the "Casino of the Wind" as stated in the February SEC filing. We were told last year that slot machines in the Earth Food Court was eliminated from plans, long before the February SEC filing.

Had slot machines been installed in the Earth Food Court or anywhere in the existing building, the tribe's former management company (Trading Cove Associates) would have been eligible to receive five percent of slot revenues from those machines. Trading Cove will not receive any fees from revenues associated with the new expansion as long as their current payments are not "materially" affected by the new expansion.

An agreement with Trading Cove gives that company five percent of all revenues at the Mohegan Sun for the period of 2000 through 2014. Trading Cove received approximately $75 million for last year alone based on that formula.

Other components of the $925 million expansion on the reservation, called Project Horizon, are expected to open in October 2010 and will include a high-rise hotel with 919 rooms, a House Of Blues Foundation Room, a 36,000 square foot music hall, restaurants and 44,000 square feet of retail space.

Other property improvements of Project Horizon will include a 1,500-space parking garage, additional surface parking lots and road improvements.

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