Friday, August 1, 2008

The Tribe In The Media: MTGA Profits Sink

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Today's installment of the Tribe In The Media series, which re-publishes articles on Indian tribes, is an article in The Day newspaper on the 89 percent drop in Mohegan Tribal Gaming Authority profits for April through June. It's a good article although the title seems to make light of what are disastrous results for Mohegan. Some readers' comments submitted to The Day newspaper's website is also shown below the article.

Keep in mind when reading the article that what is not deducted from the $5 million profit for April through June are the distributions to the tribal government of about $20 million and about $10 million that represents the difference between what the Tribe actually pays their former management partners, Trading Cove Associates, and the substantially lower amount treated as the expense for those three months. Theoretically, any payment toward MTGA's debt would also be paid out of profits and no amounts are deducted to service that debt.

3rd quarter not much fun at Mohegan Sun:
Net income down 89 percent from last year, slot and table-game revenues also off as tribe 'just didn't win as much'
By Heather Allen
The Day
August 1, 2008

The Mohegan Tribal Gaming Authority released its third-quarter results Thursday morning, and the numbers were not good.

Perhaps the most dramatic decline was the 89 percent decrease in net income, which fell from $45.6 million to $5 million compared to the third quarter of fiscal 2007.

Gaming revenues were down 10.9 percent from the third quarter last year, table-games revenues were down 25.4 percent, gross slots revenues were down 5.2 percent, net revenues were down 7.4 percent and income from operations was down 56.8 percent, according to a release issued by the gaming authority.

”There's no getting around it,” said Mitchell Etess, president and CEO of the authority. “The results are not very good.”

The quarter was “certainly challenging and far less profitable than we would have liked,” said Mohegan Tribal Chairman Bruce “Two Dogs” Bozsum during a conference call with investors Thursday.

Bozsum cited high gas and energy costs as one of the drivers of the third-quarter operating results.

Mohegan Sun follows a different fiscal year than most other enterprises and institutions. Because the casino opened in October 1996, its fiscal year begins in October.

Both of the state's tribally owned casinos have experienced declines in their slot-machine revenues for several months. High gas prices, increased competition in the Northeast market and dwindling consumer confidence in the economy have contributed to the casinos' losses.

As for the 25.4 percent drop in table-games revenue, the casino was just “unlucky,” Etess said.

Etess said the table games drop or the amount of money that is converted into chips was up by 6.4 percent to $650.3 million, but the casino lost more at the tables than it did in the previous year's third quarter.

”We just didn't win as much,” Etess said. “We were just extremely unlucky.

”We wish we wouldn't had been so unlucky. I would have liked to have won. You don't have these fluctuations with slot machines. This is really just an extraordinary, unlucky period.”

The one bright spot was nongaming revenue, which increased by 19 percent to $81.5 million from the third quarter of 2007, which Etess attributed to the several sold-out Billy Joel concerts that were held during the quarter.

Etess also reported to investors during the conference call that salary and wage expenditures were down by 0.6 percent. The number of full-time employees was decreased by 194 through attrition, and no one was laid off, Etess told investors.

”All this was done by attrition,” Etess said. “We make sure we only hire the people that we need.”


Posted - 8/1/2008 11:36:19 AM
Whoa, looks like the towns and the state are just going to have to raise your taxes to help out the casinos... yeee haaa

Livonia, MI 8/1/2008 11:47:32 AM

Posted - 8/1/2008 11:31:48 AM
Who can afford to gamble their money away when we have the highest gas tax in the country - the oil is outrageous and food is costing on average 50% more each week for each family. Give me a break. Boo hoo, tell someone who really cares. Now the State will raise some tax and say it is because the casinos are subsidizes some fund they need money for so they will take more from us instead that way. We'll get screwed again.

New London
8/1/2008 11:49:08 AM

Posted - 8/1/2008 11:26:52 AM
If you have 6% MORE chip sales and 25% LESS win at the tables let me tell you something; The M.I.T. Blackjack team is back in town or someone's cheating and Etess knows it. Mitchell and I went to grade school together in Liberty NY so I will say HI Mitch

Ledyard Ct
8/1/2008 11:48:09 AM