Mohegan — Mohegan Gaming & Entertainment reported a sizable downturn in quarterly earnings Thursday but promised an eventual turnaround when the COVID-19 pandemic’s impact on the casino industry wanes.
The tribal company’s net revenues in the three months that ended Dec. 31 — the first quarter of MGE’s 2021 fiscal year — fell to $230.8 million from $399.1 million in the same period the previous year, a decline of 42.2%. Mohegan Sun, MGE’s flagship casino, posted net revenues of $165.9 million in the quarter, down from $243.3 million, a decline of $31.8%.
Mohegan Sun’s gaming revenues during the quarter were down by 22%. Nongaming revenues were off by 51%.
Rising COVID-19 infection rates that hampered virtually all U.S. casinos during the quarter kept MGE’s casinos in Niagara Falls, Ontario, Canada, closed and caused the temporary shutdown of Mohegan Sun Pocono in Wilkes-Barre, Pa., according to Mario Kontomerkos, MGE’s president and chief executive officer.
Near the end of the quarter, business began to stabilize at most MGE properties and improved during January and into February, said Kontomerkos, who joined other MGE officials on a conference call with investors and gaming industry analysts.
“We believe very strongly that we are set up for a robust recovery,” he said.
Federal stimulus funding, falling COVID-19 infection rates and the rollout of the vaccine are expected to fuel a rally in the casino business, Kontomerkos said. Research suggests “excess, unexpended” savings in the U.S. could total as much as $1.4 trillion.
The pandemic has caused MGE to make permanent changes in its approach, Kontomerkos said, resulting in lower expenditures on labor, marketing and promotion. During the quarter, Mohegan Sun’s workforce was cut by the equivalent of 1,823 full-time employees compared to the previous year, a reduction of 36.9%.
“Subsequent to the end of the quarter, MGE successfully completed a refinancing, which extended our nearest maturities, increased our financial flexibility, and provided us with ample liquidity as we move forward,” Kontomerkos said. “We remain quite positive that our business has been optimized to benefit from what we foresee to be significant pent-up demand for leisure consumption in the months ahead.”
