Tuesday, June 23, 2009

Twin River Slot Parlor Files For Bankruptcy

By Ken Davison
Feather News

The owners of Twin River, the largest slot parlor in Rhode Island that is run by the Mohegan Tribe's former casino management partners, filed for bankruptcy protection today.

UTGR Inc. filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code that will allow the company to restructure more than a half-billion dollars of debt. The slot parlor will remain open during the bankruptcy process although they suspended greyhound racing at the track since May.

The company proposed a reorganization plan requesting the state to allow the facility to remain open 24 hours a day. Rhode Island receives about 60 percent of slot revenues. That percentage of the state's take is roughly equivalent to the percentage that the Mohegan's Pocono Downs slot parlor pays the state of Pennsylvania.

Twin River, despite it being the fifth largest slot machine location with 4,750 slot machines, has been in financial troubles since last year.

The principles of Twin River are also the partners in Trading Cove Associates, which is the company that formerly managed the Mohegan Sun casino. With less than four years remaining on their seven-year Mohegan Sun casino management contract, the Mohegan Tribal Gaming Authority struck a deal to end that contract by agreeing to pay Trading Cove five percent of Mohegan Sun's revenues for fifteen years. That agreeemnt is expected to yield about a billion dollars for the former management company.

The Mohegan Tribal Gaming Authority paid Trading Cove Associates $76.1 million for the 12 months of fiscal year 2008 alone based on its 5 percent take of Mohegan Sun revenues for that year.

Not only have these payments to Trading Cove Associates affected the Mohegan Sun's liquidity but the Twin River slot parlor opened by the former Mohegan Sun partners have had an effect Mohegan Sun's slot machine revenues.