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To hear CEO Mario Kontomerkos tell it, Mohegan Gaming & Entertainment’s secret weapon in its recent run of winning international contracts is its sense of time.
Foreign regulators too often see U.S.-based bidders for resort licenses as focused on a transactional, time-is-money approach. That’s a sense of time that grates on Old World sensitivities in cultures that view time in generations rather than in quarterly earnings reports.
It also runs contrary to the principles of the Mohegan Tribal Council, the guiding force behind the privately-held MGE.
Montville-based Mohegan Gaming seeks to build a long-term relationship with its communities, Kontomerkos explains, and is willing to invest in infrastructure and services that provide benefits beyond the resort’s footprint.
He points to the impact Mohegan Sun has had on the state of Connecticut, beyond the borders of the Uncasville resort property. There’s the $35-million investment in highway infrastructure, the $13-million investment in upgrading the regional water system and the fire/emergency medical response system that serves the larger Montville community well beyond the tribal boundaries.
And MGE’s presentations — and history — suggest it will take much the same approach in other jurisdictions.
Kontomerkos credits this long-view with swaying government regulators in Greece and South Korea to favor MGE. The result is deals to develop and manage resort complexes that could run to more than $10 billion.
That’s not to diminish Mohegan Gaming’s record developing one of the world’s busiest and most successful integrated resorts in the Mohegan Sun.
The Mohegan Sun Arena — home to a women’s professional basketball team, men’s lacrosse team and a non-stop calendar of high-profile concerts — has become an industry model. So has its profitable integration of restaurants, retail and family-friendly entertainment. And then there’s its long record of success running one of the nation’s largest casinos, a record about to be burnished as MGE becomes the first tribal operator of a Las Vegas gaming venue.
Also, MGE has influenced resort-design trends with its emphasis on a “barbell” approach with casinos at both ends of the footprint and a hotel-lobby separate from the gaming areas.
Indeed, while MGE is based in Connecticut, it’s now a well-known national and global player.
Here’s a look at Mohegan Gaming’s recent successes around the world.
Greece — A long and disputed process came to an end last month when MGE edged out Hard Rock International and the Seminole Tribe of Florida for the rights to develop a massive resort on a decommissioned airport site near Athens.
In typically contentious Greek style, it has taken 19 years to agree on a plan for redeveloping Hellenikon International Airport. And it may take another year or more before MGE’s construction partner — GEK TERNA — has the permits necessary to start work on what would be a vast complex of 1,250 hotel rooms, 40 restaurants, retail shopping, a 15,000-seat arena, golf course, entertainment complex and, of course, casino space for 1,500 slot machines and 250 table games.
Total costs could approach $9 billion, although MGE’s share is closer to $1 billion. MGE is calling the project “Inspire Athens.”
A marina, office complex and luxury homes are also planned for the expansive property, which had been Athens’ international airport until it was replaced in 2001.
South Korea — MGE’s first international win was the 2016 deal to build an integrated resort at the Inchon International Airport, one of the busiest in the world.
It took a promise of a minimum $5 billion investment to land the bid, although plans call for development in phases through 2031. Known as “Inspire,” the project will include three hotel towers and twin casinos. Ground was broken in 2019 but work has slowed along with air traffic amid the pandemic.
MGE officials put a happy face on the delays, telling an Asian gaming conference it was doing some redesign work to improve guest safety.
South Korean media, however, are reporting both MGE and a nearby rival project licensed to Caesars Entertainment are having trouble raising capital to construct resorts in this mid-pandemic business climate.
MGE has said its casino is on track to open in the second half of 2022.
Las Vegas — Come Jan. 15, Virgin Hotels will open the doors on its first hotel in Sin City, with a 60,000-square-foot casino operation managed by MGE.
It’s a historic first in Las Vegas for an operator with its roots firmly in Indian Country. It’s also a tribute to the esteem in which MGE is held by its peers in commercial gaming.
The hotel is a nearly year-long renovation of the former Hard Rock Hotel to reflect the tastes of Sir Richard Branson’s Virgin Hotel brand. The design remains largely under wraps, with tantalizing glimpses being unveiled every few weeks this fall.
Kontomerkos wouldn’t even confirm whether the site will have MGE’s signature waterfall feature and separation between the hotel lobby and casino floor.
Washington State — In mid-October, MGE and the Cowlitz Indian Tribe announced a major expansion of its 16-year-old development agreement.
Ground has been broken on a 300-room hotel to complement the flagship Ilani casino opened in 2017 in Ridgefield, Wash. Completion of the 14-story tower is expected in 2021.
The casino is also undergoing a facelift and adding two restaurants. MGE will be a partner in developing a master plan for the entire reservation with an eye toward expanding business opportunities for the site, 30 miles north of Portland, Ore.
Ontario, Canada — In the summer of 2019, MGE took over management of what the Ontario Lottery and Gaming Corp. calls its “Niagara Gaming Bundle.”
The centerpiece is Fallsview Casino Resort overlooking the Canadian side of the famed Niagara Falls. Adjacent is the brand new 5,000-seat Niagara Falls Entertainment Centre. The site is within minutes of a potentially lucrative American audience in metropolitan Buffalo.
But that international border has become an important issue in the time of COVID. The Ontario government continues to block the reopening of the casino, and the border remains closed to travel in either direction.
Interestingly, MGE is competing with a casino not far away on the U.S. side, run by the Seneca Indian Tribe. MGE’s management contract runs to 2040.
In addition to the flagship Mohegan Sun, MGE also operates Mohegan Sun-Pocono in Pennsylvania; Paragon Casino Resort in Louisiana; and Resorts Casino Hotel in Atlantic City, New Jersey.
That’s remarkable growth in the 24 years since Mohegan Sun opened its doors.
Still, there are some dark clouds on the horizon. Despite the apparent expansion, MGE’s balance sheet has shown stagnant revenues across the past few years as competition intensifies.
In April, Moody’s Investors Service downgraded MGE debt to a highly speculative “Caa2” — just three steps from rock bottom — after it missed a $19.7-million debt payment. A default was averted but concerns remain over the massive debt load.
By taking the long view, Kontomerkos and MGE are able to look beyond those concerns and beyond the pandemic’s withering effects on tourism and entertainment. While others are retrenching, Mohegan Gaming is pushing forward.
At the end of 2019, Native Business magazine named Kontomerkos one of its “top 30 CEOs.” The headline on its interview read: “Mohegan Gaming CEO Mario Kontomerkos: Planning World Domination (No, Really, He Is).”
Asked about the accuracy of that headline, Kontomerkos demurred. He then went on to outline a strategy that will have MGE going anywhere in the world for the right long-term opportunity and a relationship with “long roots.”
It’s hard not to view his non-denial as an affirmation of the insight by Native Business editors.
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