2020 was a disastrous year for Connecticut’s tribal casino operators, due to pandemic closures and government-ordered sanitary restriction measures. The gaming revenues of the two properties were crushed by the pandemic but so were their plans for 2021.
Results for the fiscal year ending november 30, 2020, couldn’t have been worse for Mohegan Tribal Gaming Authority (MTGA).
On New Year’s Eve the company reported a net loss of $ 162.1 million in contrast to the loss of $ 2.5 million the previous year.
The MTGA attributed the loss of $ 126.6 million during the period to impairment of the intangible assets of its Mohegan Sun Pocono casino located in Pennsylvania. While MTGA’s gaming division, Mohegan Gaming & Entertainment (MGE), reported that revenue from Mohegan Sun, its leading Connecticut casino, has fallen $ 715.7 million (approximately 28%) from 2019.
Likewise, the Pocono property decreased its income to $ 181.2 million, while the casino that operates in Niagara Falls (in Canadian territory) generated income of $ 180 million. This is 60% more compared to 2019 as MGE managed the property for the last six months only.
The company said it had “substantial doubts” in handling and avoiding the $ 615 million debt that is due in october.
Although, MGE CEO Mario Kontomerko said the report’s pessimistic language was “a mandatory accounting designation” and indicated that for now the company “had no plans to extend licenses or layoffs at this time to address these expirations.”
In mid-march 2020, the two Connecticut casinos had to close due to the covid outbreak and could not reopen until June.
Despite the lengthy shutdown and pandemic operating restrictions, Mohegan Sun reduced its operating profit by just 17.8% year-on-year to $ 128.4 million.
Foxwoods Resort Casino, which competes with Mohegan Sun and is run by the Mashantucket Pequot Tribal Nation, had the worst of it last year, as its revenue saw a 31.6% drop to $ 539.2 million.
Due to financial pressure the two tribes announced in december the suspension of their proposed $ 300 million casino joint venture in East Windsor. The opening of the casino project in South Korea was also delayed by a year by MGE.
The Connecticut government receives 25% of the slot machine revenue from each casino so the state has been hurt as well.
For this year no one is under any illusions, as none of the casinos expects revenues to increase to normal. But, the state still has the recourse to speed up the plans to legalize sports betting.