Mohegan ‘focused’ on growing digital as land-based operations decline

Mohegan is focused on growing its digital segment as revenue during the second quarter of 2023 fell slightly in comparison to the previous year.

Digital operations improved across all financial measurements, but land-based operations failed to match online’s strong performance during the quarter.

Publishing its Q2 results, Mohegan declared overall revenue of $415.4m, down 0.4 per cent in comparison to the previous year’s $417.1m. However, Q2’s revenue is an improvement on Q1’s $405.8m.

Income from operations dropped as well by 8.6 per cent year-over-year to $82.4m (2022: $90.1m), while net income fell by 14.8 per cent to $50.6m (2022: $59.4m).

However, while adjusted EBITDA also declined by 9.5 per cent YoY to $108.7m (2022: $120m), the quarter’s figure was the third-highest quarterly total in the operator’s 26-year history, with the previous year’s figure being the highest.

AEBITDA margin came in at 26.2 per cent, 268 basis points favourable in comparison to Q3 2019 and 262 basis points unfavourable in comparison to Q2 2022.

As of June 30, 2023, and September 30, 2022, Mohegan held cash and cash equivalents of $188.2m and $164.7m, respectively.

Commenting on the results, CEO Raymond Pineault said: “Our consolidated adjusted EBITDA of $108.7m was the third highest quarterly total in our 26-year history, while the prior-year comparable quarter was the highest to date.

“We continue to see strong results from our digital segment and are focused on growing that line of business.”

Per segment, Mohegan’s Digital revenue improved by 56.6 per cent YoY to $16.7m thanks to strong growth in Connecticut and the addition of Ontario. Connecticut online casino gaming win rose by 65 per cent to $42.8m (2022: $26m) with 10,000 active daily players. 

For Ontario’s Play Fallsview, unique players, deposits and wagering all increased in comparison to Q1 by 40 per cent, 28 per cent and 20 per cent respectively, while monthly average revenue per user currently stands at $375.

AEBITDA for digital operations rose by 52.1 per cent to $11.6m (2022: $7.6m). Connecticut operations benefited from a cumulative update to revenue share allocation from the operator’s digital gaming partner which impacted revenues and AEBITDA.

Taking a look at land-based operations, Niagara Resorts was the only location to see an uptick in revenue YoY, rising slightly by 1.8 per cent to $81.1m (2022: $79.6m), while its AEBITDA decreased by 28.5 per cent to $14m (2022: $19.6m).

Gaming revenues at the location dropped by 8.8 per cent to $54m (2022: $59.2m) due to lower slot volumes and the prior year having favourable table games hold percentage

Elsewhere, Mohegan Sun‘s revenue dropped by 2.5 per cent to $230.7m (2022: $236.5m) with AEBITDA falling by 9.5 per cent to $68.5m (2022: $75.7m). Gaming revenues were impacted by lower slot and table games volumes, resulting in a 6 per cent drop to $148.4m (2022: $157.9m).

Mohegan Pennsylvania’s revenue declined by 2.3 per cent to $65.2m (2022: $66.8m), with AEBITDA decreasing by 5.8 per cent to $14.1m (2022: $15m). Gaming revenues at the location were also affected by lower slot and table games volume, falling by 3.8 per cent to $57.1m (2022: $59.3m).

Mohegan also provided an update on its Mohegan INSPIRE project, as the South Korean destination is still scheduled to open later this year in Q4.