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Mohegan Gaming & Entertainment Announces Second Quarter Fiscal 2019 Operating Results

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Mohegan Gaming & Entertainment , a master developer and operator of premier global integrated entertainment resorts, including Mohegan Sun in Uncasville, Connecticut and Inspire Korea in Incheon, South Korea, announced today operating results for its second fiscal quarter ended March 31, 2019.

“Volume trends across our portfolio remain inline to better than expected as overall gaming volumes at our flagship property, Mohegan Sun, remain robust despite completing our second full quarter of increased competitive pressure in the Northeast,” said Mario Kontomerkos, President & Chief Executive Officer.  “Adjusting for unusually low table hold, overall MGE EBITDA would have been largely in line with our expectations, flat with last year’s comparable period, and well ahead of recent fiscal year 1Q19 performance.  At the same time, non-gaming results continue to be healthy and remain a driving factor for our growth at Mohegan Sun.  These revenue enhancements have been driven, in part, by the recent adoption of our $100 million revenue and cost improvement program – a plan we remain committed to delivering over the next several years.  Outside of the Northeast, cash flows from our managed portfolio grew strongly, up 86% year over year.  Looking ahead, in June we expect to assume operational control of two major Niagara Falls, Canada assets which will mark the first international operations for MGE and will provide increased earnings and cash flow diversity for our stakeholders.  Similarly, we have begun to mobilize construction at our development site in Incheon, South Korea, having completed our negotiations with our general contractor and following the receipt of all necessary construction permits and approvals.”

Selected consolidated operating results for the second quarter ended March 31, 2019, and prior year period (unaudited):

  • Net revenues of $307.7 million vs. $332.0 million in the prior year period, a 7.3% decrease; and
  • Income from operations of $22.2 million vs. $56.1 million in the prior year period, a 60.4% decrease primary driven by one time accelerated depreciation due to the closure of Casino of Wind; and
  • Adjusted EBITDA of $67.2 million vs. $79.9 million in the prior year period, a 15.9% decrease.

Consolidated net revenues and Adjusted EBITDA declined during the quarter, driven by lower gaming revenues at Mohegan Sun and Mohegan Sun Pocono largely driven by unfavorable hold in the quarter at both properties.  These declines were partially offset by improved non-gaming revenue growth, including entertainment and hotel revenues, at Mohegan Sun, as well as stronger Corporate Adjusted EBITDA, driven by tighter expense management and improved financial performance at ilani Casino Resort.

On October 1, 2018, the Company adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), on a modified retrospective basis.  As such, results for the three months and six months ended March 31, 2019 in this release are presented under this new guidance, while results for the three months and six months ended March 31, 2018 remain presented under prior guidance.  For comparative results for all periods as reported under the new guidance, please see our supplemental earnings deck, available on our website (https://mohegangaming.com/financial-information/).

Mohegan Sun

Operating results (in thousands, unaudited):





For the Three Months Ended  



March 31,



March 31,







Percentage



2019



2018



Variance



 Variance

Net revenues

$               238,391



$           260,354



$        (21,963)



(8.4%)

Income from operations (1)

$                 19,913



$             57,779



$        (37,866)



(65.5%)

Adjusted EBITDA

$                 59,341



$             77,746



$        (18,405)



(23.7%)

















(1) Includes $21.6 million in accelerated depreciation related to Casino of the Wind.

Net revenues and Adjusted EBITDA declined during the quarter, driven by lower overall gaming revenues and unfavorable table hold during the period, which was partially offset by stronger non-gaming results.  Slot and table volumes declined 8.7% and 3.2%, respectively, in line with internal expectations.  Had table hold percentage fallen into the historically normal range, net Revenues and Adjusted EBITDA would have declined less than 3.1% and 7.4%, respectively, on a 606 to 606 basis.  Non-gaming revenues increased during the quarter, driven by improvement in nearly all segments of the business.  The higher than normal decline in income from operations relates to the one-time accelerated depreciation expense of $21.6 million, caused by the closure of the Casino of the Wind in March, as that space will be designed and repurposed for higher and better use.

Mohegan Sun Pocono

Operating results (in thousands, unaudited):





For the Three Months Ended  



March 31,



March 31,







Percentage



2019



2018



Variance



 Variance

Net revenues

$                 61,241



$             67,130



$          (5,889)



(8.8%)

Income from operations 

$                   8,214



$               8,872



$             (658)



(7.4%)

Adjusted EBITDA 

$                 11,592



$             12,230



$             (638)



(5.2%)

Net revenues declined during the quarter driven by lower gaming revenues, largely reflecting the adverse impact from lower table hold.  However, the year-over-year decline in Adjusted EBITDA was more muted due to a strong focus expense management, including lower payroll costs and certain casino marketing and promotional expenses. Notably, local marketing activity has started to return to more normalized levels following aggressive promotional activity from a regional competitor over the last several quarters.

Corporate

Operating results (in thousands, unaudited):





For the Three Months Ended  



March 31,



March 31,







Percentage



2019



2018



Variance



 Variance

Net revenues

$                   8,125



$               4,593



$            3,532



76.9%

Loss from operations

$                 (5,901)



$            (10,579)



$            4,678



44.2%

Adjusted EBITDA

$                 (3,716)



$            (10,122)



$            6,406



63.3%

The increase in net revenues and Adjusted EBITDA was primarily due to higher management fees from ilani Casino Resort driven by continued improvement in performance at the property.

MGE Property Information









Net Revenues



Income (Loss) from Operations



Adjusted EBITDA

(in thousands, unaudited)



      For the Three Months Ended



For the Three Months Ended



For the Three Months Ended







March 31,



March 31,



March 31,



March 31,



March 31,



March 31,







2019



2018



2019



2018



2019



2018

Mohegan Sun





$         238,391



$        260,354



$           19,913



$           57,779



$           59,341



$           77,746

Mohegan Sun Pocono



61,241



67,130



8,214



8,872



11,592



12,230

Corporate





8,125



4,593



(5,901)



(10,579)



(3,716)



(10,122)

Inter-segment revenues



(60)



(60)









Total





$         307,697



$        332,017



$           22,226



$           56,072



$           67,217



$           79,854

Other Information

Liquidity

As of March 31, 2019, MGE held cash and cash equivalents of $91.4 million, compared to $103.9 million as of September 30, 2018.  As of March 31, 2019, $55.0 million was drawn on MGE’s $250.0 million revolving credit facility, while no amounts were drawn on MGE’s $25.0 million line of credit.  As of March 31, 2019, letters of credit issued under the revolving credit facility totaled $2.3 million, of which no amounts were drawn.  Inclusive of letters of credit, which reduce borrowing availability under the revolving credit facility, MGE had approximately $192.7 million of borrowing capacity under its revolving credit facility and line of credit as of March 31, 2019.

 

About Mohegan Gaming & Entertainment:

Mohegan Gaming & Entertainment is a master developer and operator of premier global integrated entertainment resorts, including Mohegan Sun in Uncasville, Connecticut, and Inspire in Incheon, South Korea.  The Company is owner, developer, and/or manager of integrated entertainment resorts throughout the United States, including Connecticut, New Jersey, Washington, Pennsylvania, Louisiana, Northern Asia, and, beginning in mid-2019, Niagara Falls, Canada.  MGE owns and operates Connecticut Sun, a professional basketball team in the Women’s National Basketball Association, and the New England Black Wolves, a professional lacrosse team in the National Lacrosse League.  For more information on MGE and our properties, visit www.mohegangaming.com.

 

SOURCE Mohegan Gaming & Entertainment

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Gambling in the USA

New Trade Association Launches Unprecedented Effort to Strengthen Responsible Online Gaming, Promote Best Practices

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New Trade Association Launches Unprecedented Effort to Strengthen Responsible Online Gaming, Promote Best Practices

 

The Responsible Online Gaming Association (ROGA), an independent trade association launched by seven of the largest U.S. legal mobile gaming companies, will actively promote a new industry-wide best practices charter, overseen by one of the world’s foremost experts in the field of responsible gaming (RG).

This unprecedented effort will be led by Dr. Jennifer Shatley, a deeply respected responsible gaming executive with more than 25 years of experience in the industry. She will serve as ROGA’s full-time Executive Director, and her role will be to facilitate widespread education to all relevant parties on the subject of responsible gaming.

ROGA will embark on a series of initiatives under Dr. Shatley’s direction. These include research, consumer and industry responsible gaming education and awareness, promoting responsible gaming best practices, an independent data clearinghouse, and an independent certification program.

Demonstrating their commitment to this endeavor, initial member companies – who together represent more than 85% of the legalized online sports betting and iGaming industry – have pledged more than $20 million in support of ROGA’s mission in year one. ROGA’s member companies include BetMGM, bet365, DraftKings, Fanatics Betting and Gaming, FanDuel, Hard Rock Digital, and PENN Entertainment.

“I am humbled, honored, and excited to be selected to lead ROGA during this important period of growth in legalized mobile gaming. Many of America’s largest legal mobile gaming operators will be establishing a framework that helps to aid in responsible gaming education and awareness. Together, our members will work alongside researchers, experts, regulators and stakeholders to promote responsible online gaming and maximize our efforts to support additional responsible gaming education and awareness. By coming together with a clear set of objectives, ROGA and our members will work to enhance consumer protections and help provide easier and more efficient access to responsible gaming tools for consumers to enjoy the entertainment of online gaming,” said Dr. Shatley.

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Compliance Updates

Play’n GO awarded Pennsylvania license 

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Play’n GO awarded Pennsylvania license 

 

Play’n GO has continued on its upward trajectory in North America by landing its latest US iGaming licenses and will soon supply its award-winning content portfolio to operators and players in Pennsylvania and Delaware

These licenses are the fifth and sixth obtained by the Swedish gaming giants in the USA, following New Jersey, Michigan, West Virginia, and Connecticut.

Play’n GO have taken a dual-pronged approach to its strategy in North America, with these US licenses being complimented by the company’s success north of the border in Canada, where Play’n GO was one of the first suppliers to be licensed to supply slot games in the province of Ontario.

Although early in its American journey, Play’n GO games such as Piggy Blitz, make regular appearances in the top 15 most popular titles in all of North America*.

Magnus Olsson, Chief Commercial Officer for Play’n GO, said: “Play’n GO content is the most conducive to player retention across the industry. With player acquisition costs sky high in the US, we’re pleased to be able to offer operators in Pennsylvania access to our content which will keep players coming back for more.

“We are determined to be the number one casino gaming supplier in every regulated market in the world, and given that we are thriving in more than 25 jurisdictions around the world where we have a license, we fully expect a similar success story in Pennsylvania in the coming years.”

Play’n GO is set to release more than 50 online slot titles in 2024 and is active in more than 25 regulated jurisdictions worldwide, including Ontario, New Jersey, Michigan and West Virginia in North America.

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Gambling in the USA

Lightning Box concocts scientific experiment with new release Experi-MENTAL

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 Light & Wonder, Inc. (NASDAQ and ASX: LNW) (together with its subsidiaries, “Light & Wonder” or “L&W”) announced the launch of its new game, Experi-MENTAL, stacked with features, modifiers and a clash with the mad scientist.

Experi-MENTAL has two in-game features to enhance the overall player experience.

This 3×5 title, exhibits the distinctive Expanding Wild Feature, which can award huge prizes for players should the Wild Brain symbol expand and replicate by five times during the Free Games round.

When players enter the mad scientist’s lab, they will stumble across the Upgrading Feature, which zaps the 9, 10, J, Q, K or A symbols into high-paying icons, including Test Tubes, Power Switch, Cat, Pug or Man. The wins are then accumulated and paid out once the reels have stopped spinning.

The Barrel Pick Feature can radio-activate the feature by awarding an extra 15 Free Games, as players are presented with highly dangerous barrels with an unknown material.

A meter appears when players select a barrel, with a red area and a green area in view. Landing on the meter’s green area ensures the Free Games round is triggered and additional games are awarded but landing in the red zone activates only the round itself.

The classic Free Games mode is unlocked when Scatter symbols appear, with five Scatters granting the maximum of 10 Free Games and the Barrel Pick Feature. During the round, Free Games can be retriggered at any time.

Experi-MENTAL is set to go live with Caesars in New Jersey, Michigan and Ontario initially, and will be available at a later date to customers of Light & Wonder’s industry-leading OPENGAMING™ platform.

 Michael Maokhamphiou, Studio Director at Lightning Box, said: “Experi-MENTAL is one Wacky slot game, and we believe it can propel our slots onto the next level.

 “During this game, players can unlock some new features, which add a dramatic element to this slot and classic round that are a cornerstone of Lightning Box’s portfolio. We are in no doubt will love taking on the mad scientist in this epic title.”

 Rob Procter, VP of Game Development at Light & Wonder, said: “2024 is going to be a big year for Lightning Box and the launch of Experi-MENTAL gives players the opportunity to showcase this thrilling game.

 “With a variety of different features exhibited on this captivating title, it sets Lightning Box apart from its competitors, ensuring the player experience is unrivalled.”

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