Mohegan Gaming CEO talks growth with HM

The Fallsview Casino Resort joined the MGE portfolio in June. Photo credit: Mohegan Gaming and Entertainment(Photo credit: MGE)

Casino developer and operator Mohegan Gaming and Entertainment last month executed its first expansion beyond the United States in the Americas, taking over day-to-day gaming operations of three properties on the Canadian side of Niagara Falls. The properties include The Fallsview Casino Resort, Casino Niagara and the upcoming 5,000-seat Niagara Falls Entertainment Centre.

MGE CEO Mario Kontomerkos
Photo credit: MGE

MGE CEO Mario Kontomerkos told Hotel Management the deal came about when the government of Ontario started seeking an outside operator for 17 casinos that had been owned and managed by its subsidiary, the Ontario Lottery and Gaming Corp.

At the same time, the Connecticut-based company was looking to develop a project in the area. “We looked at Niagara Falls very closely and it fit a lot of the parameters that we look for in a market,” said Kontomerkos. “We had an opportunity to take operational control of two of the largest casino resort assets in North America and Canada in addition to [developing] a 5,000-seat theater, which squarely fits in the middle of what it is we do from a product offering.”  

Virtual Event

Hotel Optimization Part 3 | Available On Demand

With 2020 behind us and widespread vaccine distribution on the horizon, the second half of the new year is looking up, but for Q1 (and most likely well into Q2) we’re very much still in the thick of what has undeniably been the lowest point of the pandemic. What can you be doing now to power through and set yourself up for a prosperous 2021 and beyond? Join us at Part 3 of Hotel Optimization – A Virtual Event, now available on demand, for expert panels focused on getting you back to profitability.

Long-Term Planning

Kontomerkos suspects MGE won the bid to operate the Niagara Falls assets due to the company’s existing properties in several U.S. states. “The 10,000-seat arena that we have here in {Uncasville] Connecticut [is] one of the highest-volume arenas in the world,” he said, adding tthe flagship Mohegan Sun property attracts 12 million people per year, compared to the 42 million that visited all of the resorts in Las Vegas last year.

But the company perhaps had another quality that made it stand out from other operators bidding to manage the casinos: MGE is fully owned by the Mohegan tribal Indians of Connecticut, a tribe with 400 years of history behind it.

“I think [the owners] were comforted by the heritage of the Mohegan tribe, the rich traditions of the Mohegan tribe,” said Kontomerkos, explaining the tribe takes “a very generational approach to business, a very long-term approach to busines. I can tell you from personal experience that the way we make business decisions is not for the next month or the next quarter, and sometimes not even for the next year." He added, "A lot of times we've got to test our decisions against the very long-term horizon. Our decisions have to be sustainable for 25 to 50 years because the whole purpose of this organization, the reason that this organization exists, is for the generational sustainability of the tribe and also the communities that it operates in.” 

When planning for the long term, relationships are more important than individual transactions, Kontomerkos suggested. “How do we maintain relationships for as long as possible—and that's for every stakeholder? How do we maintain our relationships with our employees for as long as we can? How do we maintain our relationships with our vendors for as long as we can? How do we maintain our relationships with our communities as long as we can?” 

Global Growth

While the Niagara Falls development is MGE’s first project outside of the U.S. in the Americas, the company already has another international complex in the works. Project Inspire was announced last year and is slated to open by 2023 at the Incheon International Airport in South Korea, making the Mohegan tribe the first to enter the Asian gaming market. The entertainment and gaming complex will include a hotel and a 15,000-seat arena. “That city welcomes 15 million people a year, and that airport, which we’re a thousand feet away from, welcomes 70 million people per year,” Kontomerkos said. Niagara Falls, meanwhile, attracts about 13 million people per year, both international and domestic. 

Those kind of visitor numbers are a major factor for MGE’s interest in a region, said the CEO, since the company specializes in multibillion-dollar, integrated entertainment resorts. “There's a certain type of market that can attract and consume such a development,” he said. “We're looking for large markets demographically with affluent and mobile folks…big entertainment markets where our products can really shine.”

The Incheon development is only the first phase of what Kontomerkos expects will be four or five phases over a period of 20 or 30 years. “So that'll be a continued opportunity for growth and expansion for us," he said.

Asia has become a very large market for globally branded casino resorts over the past two decades, the CEO told HM, and the region is a “source of opportunity” for gaming companies. While MGE is still seeking opportunities in North America, the company—as a “fore-runner and innovator” in integrated entertainment resort developments—is looking to Europe for further growth, pursuing an opportunity to invest in a large integrated entertainment resort in Athens, Greece. 

“It fits the bill of what we've been talking about,” Kontomerkos said of the development along the Athenian Riviera. “It's a sophisticated, cosmopolitan market with a very large tourism influx every year.” In line with Incheon, Niagara Falls and Connecticut, he estimates that Athens has 30 million visitors per year. 

Ultimately, Kontomerkos wants to build MGE into a brand with loyal high rollers who can get free trips to resorts around the world. “This is the type of global cross-marketing networking opportunity that we see here going forward,” he said.

In the long run, he sees opportunities in owning, operating and developing these integrated entertainment resorts at the pace MGE has set already. “That's probably gonna be the primary focus for us,” he said, noting he doesn’t expect the company to begin franchising like Caesars did last year. “But that doesn't mean that there couldn't be an opportunity to do something like that in the future,” he added.