BOSTON — Mohegan Sun faces financial peril after losing out to Wynn Resorts in its bid to open a casino in the Boston-area, a Moody’s Investor Service analysis warns.
In a note to investors Wednesday, analyst Keith Foley said the loss “heightens our concerns” about the Mohegan Tribal Gaming Authority’s ability to refinance its debt at an interest rate and terms equal to or better than what it’s now paying. He said the Connecticut-based casino company is highly leveraged and could face significant debt repayment just as Wynn’s Massachusetts casino opens sometime in 2017.
Foley said Mohegan Sun’s long-term financial prospects “would have improved materially” had its proposed $1.1 billion casino at the Suffolk Downs horse racing track, which straddles East Boston and Revere, been chosen for the lone Boston-area casino license. Massachusetts gambling regulators instead went with Wynn’s $1.6 billion plan to redevelop the industrial waterfront in Everett.
“At a minimum, we believe this would provide a substantial hedge against potential losses at its Connecticut casino,” which generates the bulk of the company’s revenue but is suffering as competition expands in the region, he wrote. Foley said there’s now greater pressure on Mohegan Sun to succeed in other efforts to diversify its revenue base, such as pursuing a casino license in Philadelphia.
Elsewhere, Foley said he expects the gambling market in Boston to perform significantly better than most other U.S. markets, which would benefit Wynn.
He said Boston residents have a “high propensity” to gamble, citing the number of Massachusetts residents who visit Connecticut’s Indian casinos. Boston also has the business, entertainment and transportation infrastructure to draw travelers from outside the region and internationally, Foley said.
In a related development, the Massachusetts Gaming Commission, which awarded Wynn a casino license earlier this week, says it will look for ways to keep thoroughbred horse racing in the state now that Suffolk Downs is expected to close, following Mohegan Sun’s loss.
Copy the Story LinkSend questions/comments to the editors.
Success. Please wait for the page to reload. If the page does not reload within 5 seconds, please refresh the page.
Enter your email and password to access comments.
Hi, to comment on stories you must . This profile is in addition to your subscription and website login.
Already have a commenting profile? .
Invalid username/password.
Please check your email to confirm and complete your registration.
Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why.
Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.