UNCASVILLE, CT – Mohegan Tribal Gaming Authority announced operating results for its second fiscal quarter ended March 31, 2023.
“Our consolidated adjusted EBITDA of $102.1 million reflects the positive results from our properties and digital operations,” said Raymond Pineault, Chief Executive Officer of Mohegan. “We are encouraged by the strong results from our digital segment and look forward to continued growth in that line of business.”
“Our adjusted EBITDA margin of 25.2% was 337 basis points favorable compared with our pre-COVID-19 second quarter of fiscal 2019 and 99 basis points favorable compared with the prior-year period,” said Carol Anderson, Chief Financial Officer of Mohegan.
The growth in net revenues compared with the prior-year period was primarily driven by a full period of operations and a return to relatively normal operating conditions at the Niagara Resorts, combined with the continued growth in our online casino gaming and sports wagering operations in Connecticut.
Mohegan Sun
Net revenues increased $10.4 million compared with the prior-year period primarily due to increases in slot and sportsbook revenues, along with strong non-gaming growth driven by food, beverage and hotel revenues. Adjusted EBITDA of $65.6 million was 4.3% favorable compared with the prior-year period. The adjusted EBITDA margin of 29.0% was 415 basis points favorable compared with our pre-COVID-19 second quarter of fiscal 2019 and 15 basis points unfavorable compared with the prior-year period.
Mohegan Pennsylvania
Net revenues increased $1.1 million compared with the prior-year period as a result of increased food, beverage and hotel revenues. Adjusted EBITDA was flat compared with the prior-year period, as increased labor costs offset the increase in net revenues. The adjusted EBITDA margin of 20.9% was 199 basis points favorable compared with our pre-COVID-19 second quarter of fiscal 2019 and 39 basis points unfavorable compared with the prior-year period.
Niagara Resorts
Net revenues increased $18.5 million compared with the prior-year period due to higher gaming volumes and increased non-gaming revenues. Prior year results were impacted by a government mandated closure from January 5, 2022 through January 30, 2022, due to a rise in COVID-19 cases in Ontario at that time. Non-gaming revenues benefited from the recent opening of the 5,000-seat OLG Stage entertainment venue which held its grand opening in February 2023. Adjusted EBITDA decreased $2.3 million or 32.8%, and the adjusted EBITDA margin of 6.8% was 685 basis points unfavorable compared with the prior-year period. The decreases in adjusted EBITDA and adjusted EBITDA margin are primarily due to an approximately $3.7 million non-cash adjustment related to the Casino Operating and Services Agreement contract asset, which negatively impacted gaming revenues, and the continued reintroduction of certain lower margin non-gaming amenities.
Mohegan Digital
Net revenues increased $16.8 million compared with the prior-year period, driven by strong growth in our Connecticut digital business and the recent addition of digital gaming in Ontario. Adjusted EBITDA of $18.1 million was $16.6 million favorable compared with the prior-year period. Mohegan Digital Connecticut also benefited from a one-time cumulative update to the revenue share allocation from our digital gaming partner, which impacted net revenues and adjusted EBITDA.
Management, Development and Other
Adjusted EBITDA of $10.0 million was 5.8% unfavorable compared with the prior-year period, primarily due to an increase in labor costs related to management and development operations. Net loss for the period was $14.4unfavorable compared with the prior-year period, primarily due to a loss on fair value adjustment due to changes in the estimated fair value of the warrants and put option related to Mohegan INSPIRE.
All Other
Adjusted EBITDA of $0.8 million was $0.6 million or 393.3% favorable compared with the prior-year period, primarily due to increased gaming revenues at Mohegan Casino Las Vegas.
Corporate
Adjusted EBITDA was $1.9 million unfavorable compared with the prior-year period, primarily due to higher employee-related costs.
Liquidity
As of March 31, 2023 and September 30, 2022, Mohegan held cash and cash equivalents of $188.8 million and $164.7 million, respectively. Inclusive of letters of credit, which reduce borrowing availability, Mohegan had $226.2 million of borrowing capacity under its senior secured credit facility and line of credit as of March 31, 2023. In addition, inclusive of letters of credit, which reduce borrowing availability, the Niagara Resorts had $121.9 million of borrowing capacity under the Niagara Resorts revolving credit facility and swingline facility as of March 31, 2023.
