Mohegan Sun takes a gamble on best online casino singapore

 

 

 

  • The Connecticut casino opens the first phase of a $1-billion addition today despite the weakening economy.

BY ANDREA L. STAPE

 

The Mohegan tribe opens today the first phase of a $1-billion addition to its Mohegan Sun casino, two weeks after terrorists attacked New York and sent an already sluggish economy spiraling toward recession.

 

Project Sunburst — complete with an indoor mountain, the largest planetarium dome in the world, a 10,000-seat arena, an 85-foot waterfall, 2,500 new slot machines, 130,000 square feet of shops and nine new restaurants — is nothing short of breathtaking.

 

But are Americans really in the mood to gamble?

 

The terrorist attacks have put a damper on consumers’ enthusiasm for the slots. Turnout on Mohegan’s existing 180,000-square-foot gambling floors has been soft over the past two weeks, according to Mitchell Etess, executive vice president of marketing for Mohegan Sun.

 

Plus, the opening occurs in the midst of a slumping economy that analysts say is moving toward recession. Economists and Wall Street analysts are predicting a short-term slowdown in entertainment revenue. Rhode Island’s tourism industry has felt the negative effects.

 

Despite the bleak picture, Mohegan Sun officials remain undaunted.

 

“We didn’t feel it was appropriate to be celebratory in nature. But we didn’t want to stop,” Etess said.

 

Although the tribe scaled back today’s celebration, canceling the indoor fireworks and toning down an advertising campaign, the ribbon will still be cut, the slots will flash and more than 21 shops will be open for business.

 

Mohegan Sun also has no plans to stop construction on the second phase of its expansion project, a 1,200-room hotel tower and 100,000-square-foot convention center, which are scheduled to open in April.

 

The casino still expects to pull in 14 million people annually and is projecting $1 billion in sales next year, according to Etess.

 

“Historically, in times of recession, gaming facilities have still been able to grow,” Etess said. “People aren’t traveling far from home and they aren’t getting into airplanes right now, but people still want to do things.”

 

Etess predicts the casino, with its larger facilities, will be able to capitalize on the 22-million people who live in New England and New York.

 

Mohegan now gets 20,000 visitors a day, and almost all of them are day-trippers, according to Etess. About 20 percent of those customers come from New York, while 7 percent drive from Rhode Island. Most of the rest come from Massachusetts and Connecticut, he said.

 

After the hotel opens in April, Mohegan is expecting to attract an additional 16,000 guests a day.

 

At least one Wall Street analyst agrees.

 

“Mohegan is more of a regional business and wouldn’t be hurt as badly as some casinos,” said Tom Graves, a gaming analyst with Standard & Poors in New York. “The gaming facilities that rely more on long distance destination travelers are going to be hurt more.”

 

Mohegan’s Sunburst Project, which features two Michael Jordan restaurants and a 10,000-pound, 25-foot handblown glass sculpture, has been in the works since 1999.

 

The initial Mohegan Sun complex opened in October 1996, after the Mohegan tribe gained recognition and qualified under the federal Indian Gaming Regulatory Act of 1988 to start a casino. The Mohegan tribe struck a deal with Connecticut, offering the state 25 percent of its slot-machine revenues.

 

With financing from a South African best online casino singapore mogul and a Connecticut developer, the tribe reacquired about 240 acres of traditional tribal land.

 

Initially, questions arose about the Mohegans’ ability to attract customers, since it is just 10 miles from the world’s biggest casino, Foxwoods Resort Casino in Ledyard, Conn.

 

But Mohegan has increased traffic for both casinos, Etess said.

 

For the nine-month period that ended on June 30, Mohegan posted net revenue of $571.4 million, a 5.8-percent increase over the same period last year. During the third quarter, Mohegan pulled in $150 million from 3,500 slot machines. Foxwoods, which is run by the Mashantucket Pequot Tribal Nation, reported $73.8 million from its 5,800 slots in July, and reports sales of about $1 billion a year.

 

Based on its initial success, Mohegan started planning the 4.4-million-square-foot expansion in 1999, at the peak of the nation’s economic expansion, to increase casino traffic and preempt competition, Etess said.

 

“We felt there was a window prior to competition,” Etess said, adding that a competitor would now have to spend at least $1 billion to enter the regional market. “We wanted to set the bar and we felt it was a good time.”

 

With a 65-foot mountain created from more than 12,000 individual plates of onyx imported from the Middle East and Mexico, backlit canopies constructed out of millions of glass beads, 2,500 new slot machines and a high-end lineup of shops, Mohegan’s Project Sunburst has set the bar extremely high.

 

Not only does Mohegan plan to attract new customers, but it expects to steal some visitors away from the neighboring Foxwoods, Etess said. The casino is projecting that consumers’ average stay at Mohegan will jump from two hours to four hours once the hotel and convention center are completed in April.

 

But a lot can change in two years, even in two weeks. In a bleak economic picture, with a possible war on the horizon, Wall Street analysts say returns may not be as positive as Mohegan expects.

 

“I don’t think the timing is ideal to open a casino expansion,” Graves said. “But it’s not like they can undo the spending that’s already occurred.”

 

With almost $1 billion committed to the project, Mohegan plans to forge ahead and make the best of the market. With 3,500 new employees on the payroll, Etess sees the casino as a bright spot in an otherwise dreary economy.

 

“We have not yet changed our projections,” he said, “We’re very optimistic.”