Mohegan Posts Q1 Net Loss Due to Inspire Opening Costs

The Mohegan Inspire resort, located in South Korea, began its soft opening on November 30th. Visitors were granted access to various amenities, including three hotel towers, over 10 restaurants, and a multi-purpose arena. The resort plans to undergo further opening phases, with a casino exclusive to foreigners already in operation. Mohegan anticipates full operational status by the end of the first half of the year.

However, the expenses associated with this grand opening influenced the financial performance of Mohegan in Q1. Alongside adjustments in non-controlling interests at Niagara Resorts and lower table hold at some properties, this led to a net loss for the quarter.

Examining segmental performance for the three months ending December 31st, 2023, gaming revenue saw a modest increase of 1.7% to $285.7 million. Other sectors such as food and beverage, hotel, and retail experienced varying degrees of growth as well.

Despite these positive developments, Mohegan encountered challenges in its US properties, particularly at the Mohegan Sun property in Connecticut, where revenue declined by 4.6% due to decreased gaming volumes.

A notable success story for Mohegan in Q1 was its digital business, which witnessed a remarkable 224.1% increase in revenue. This surge was attributed to accounting adjustments related to online casino and sports wagering payments in Connecticut.

Operating costs surged by 16.9% to $393.3 million in Q1, resulting in a pre-tax loss of $96.8 million for Mohegan. Adjusted EBITDA also experienced a decline of 21.9% to $79.0 million for the quarter.

The road ahead for Mohegan will likely involve strategic adjustments to mitigate losses and capitalize on areas of growth, particularly in its digital ventures.