Despite a positive increase in revenue, reaching $425.2 million, up from the previous year’s $406.6 million, Mohegan Gaming & Entertainment faced a setback with a net loss registered in the first quarter. The uptick in revenue was attributed to several key developments, including the growth of its digital operations and a boost in non-gaming revenues originating from their newest venture, Mohegan Inspire.
Mohegan Inspire, the company’s ambitious resort project, marked its initial phase of opening on November 30, offering guests access to select amenities. This soft launch included availability to its three hotel towers, a variety of over ten dining destinations, and a versatile multi-purpose arena. Further phases of the resort’s opening sequence are slated to continue, with a foreigners-only casino having thrown open its doors last week. Mohegan expects the resort to hit full operational stride by the end of the first half of the year.
The fiscal picture, however, was not without its blemishes as the costs incurred from the grand opening of Mohegan Inspire weighed on the quarter’s financial outcomes. Additional factors tipping the balance included non-controlling interest adjustments at Niagara Resorts and an underperformance in table hold at some of Mohegan’s properties, cumulatively contributing to a net loss for the period.
A detailed breakdown reveals that gaming revenue saw a marginal increase of 1.7% to $285.7 million. Food and beverage revenue savored a hearty climb of 13.8% to $43.7 million, while the hotel sector also checked in with a rise of 6.8% to $31.6 million. Retail, entertainment, and other revenue streams collectively posted an 11.3% increase, reaching $64.3 million.
The Mohegan Sun, strategically positioned in Connecticut, United States, remains the powerhouse of the company’s financial muscle despite experiencing a 4.6% dip in revenue to $228.4 million. This drop was primarily due to diminished gaming volumes and table holds. In other regions within the U.S., Mohegan Pennsylvania documented revenues of $59.0 million, slightly down by 1.2%, where a decline in gaming volumes was partially salvaged by gains in food, beverage, and hotel income.
Turning to Canadian operations, Niagara Resorts reported a marginal revenue uptick of 0.2% to $74.2 million, powered by vibrant food, beverage, and entertainment sectors. The unanticipated hero of the quarter, however, was Mohegan’s digital arm, which reported a substantial 224.1% revenue surge to $36.2 million, largely due to an accounting adjustment dictated by Connecticut legislation on online casino and sports wagering financial contributions to the state.
In addition to these traditional streams, Mohegan declared $24.3 million in management, development, and other revenues—an impressive 63.6% leap over the preceding year, boosted in part by contributions from Mohegan Casino Las Vegas.
On the ledger’s flip side, operating expenses for the quarter rose sharply by 16.9% to hit $393.3 million. Gaming costs, advertising, and general and administrative outlays were significant contributors to these figures. The aggregate of other costs, which encompassed $66.3 million in net interest expenses and a $62.6 million loss on fair value adjustment, further pressured the financials.
The culmination of these costs left Mohegan with a hefty pre-tax loss of $96.8 million against a modest profit of $2.2 million in the year-ago quarter. After tax considerations, the net loss totaled $97.0 million, displacing the previous year’s profit of $807,000. Additionally, adjusted EBITDA receded by 21.9% to $79.0 million.
As Mohegan navigates the complexities of expansion and digital transformation in the gaming and hospitality sectors, Q1’s fiscal challenges punctuate a narrative of growth tempered by strategic investments and external economic factors. The coming months will prove pivotal as the group seeks to align its new ventures with financial stability and profitability.
