Mohegan Digital enjoys strong Q3, land-based contribution dips
Mohegan Digital expanded into Ontario in Canada during Q3, while the operator also highlighted growth in Connecticut.
Digital was the shining star for Mohegan which reported a revenue decline in a number of other segments, namely its flagship Mohegan Sun land-based casino, also in Connecticut.
Chief executive Ray Pineault singled out digital when reflecting on the quarter, saying the operator is very much focused on growth within this area.
Gaming suffers as revenue falls in Q3
Net operating revenue for the three months to 30 June was down 0.4% year-on-year.
The largest area of decline was gaming, where revenue fell 4.1% to $281.9m. However, it remained by far Mohegan’s largest source of revenue.
In contrast, food and beverage revenue climbed 12.6% to $40.1m, while hotel revenue was also up 0.3% to $30.4m. Mohegan also noted a 10.1% rise in retail entertainment and other revenue during the quarter.
No digital dilemma for Mohegan
Looking at each segment, revenue at Mohegan Sun slipped 2.5% year-on-year to $230.7m due to lower slot and table games volumes. The operator said strong non-gaming growth driven by food, beverage, entertainment and hotel revenues, partially offset a decline in gaming revenue.
Revenue at Mohegan Pennsylvania was also down 2.3% to $65.2m as a result of lower gaming volumes. However, again, the operator said this was partially offset by strong food, beverage and hotel revenue.
There was better news from Niagara Resorts, with revenue edging up 1.8% to $81.2m. This was driven by a continued ramp of non-gaming amenities, including the new OLG Stage entertainment venue. However, gaming revenue fell $5.2m due to lower slot volumes.
Amid declines in the land-based market, digital revenue was 56.6% higher at $16.7m. This came on the back of the Ontario launch and growth in Connecticut.
Speaking to iGB earlier this week Mohegan Digital president Rich Roberts explained igaming would look to support the brick-and-mortar properties.
“We won’t be spreading rapidly across the US and looking to compete in every state,” Roberts said. “Mohegan Digital supports the Mohegan brand as an extension of the properties.”
Higher spending nudges net profit down
Operating costs for the quarter were 1.8% higher at $333.0m. Mohegan also noted $29.5m in finance-related costs, leaving $52.8m in pre-tax profit, down 16.3% on last year.
The operator paid $2.2m in tax and also took off $64,000 in profit attributable to its non-controlling assets. As such, net profit amounted to $50.6m, down 14.8%.
Adjusted EBITDA also slipped 9.5% to $108.7m – although Mohegan said this was still the third-highest quarterly total in its 26-year history.