Mohegan Gaming & Entertainment to Assume Control of Ontario’s Niagara Casino Bundle Tuesday

Posted on: June 10, 2019, 03:28h. 

Last updated on: June 10, 2019, 03:28h.

Philip Conneller @casinoorgphilc Read More

Expertise: Gaming Business, Regulation, Tribal Gaming.

Mohegan Gaming an Entertainment (MGE) will take over the reins of two Canadian casinos on Tuesday, the Casino Niagara and Fallsview Casino Resort. MGE CEO Mario Kontomerkos said Friday it was “the next stage of our international expansion” and promised to invest “several hundred million” in the properties.

The Connecticut-based tribal casino operator was granted the right to manage the casinos — collectively known as the “Niagara Bundle” — by their owner the Ontario Lottery Corp (OLC), following a competitive bidding process last year.

As well as operating the Mohegan Sun casinos in Connecticut and Pennsylvania, MGE is about to begin construction work on a $1.6 billion project in Incheon, South Korea, and has its eyes on the emerging gaming market in Japan. This will be its first foray into the Canadian gaming market.

OLC Casino Sell Off

Ontario announced in 2016 the decision to privatize a large chunk of its state-owned casinos, bundle by bundle, in the hope of maximizing their revenue potential. The market has strong potential but has suffered from under investment.

This was evident in the caliber of bidders MGE beat out to win the contract, which initially included Hard Rock International and Caesars Entertainment.

It’s already a top destination, attracting 12.7 million visitors a year, and they’ve never had anyone with MGE’s marketing expertise helping them,” said Kontomerkos told The Day. “It’s a very exciting opportunity for us…”

MGE will essentially lease the properties from the OLC for 21 years. While the precise terms of the agreement have not been disclosed, it’s believed MGE will pay an annual tax to the province in return for receiving the casino revenue. The operator will be responsible for all costs to market, modernize, and expand the properties.

Also included in the deal is a 5,000-seat entertainment center, currently under construction near to the Fallsview Casino and due to open this summer. MGE will manage and book events for the center.

A Tale of Two Cities

MGE’s operation of the Niagara Bundle means that casinos on either side of North America’s most famous waterfall will be run by tribal operators.

MGE will be in competition with the Seneca Nation, which owns and operates the Seneca Niagara, in the City of Niagara Falls, New York State. The Seneca is currently engaged in a stand off with New York over revenue-share payments and has stopped making contributions to state government.

This has caused a certain amount of financial hardship to the City of Niagara Falls, which has relied on $12 million or so per year in revenue-share payments from the Seneca to plug its budget shortfall.

On the other side of the Rainbow Bridge, the City of Niagara Falls, Ontario, while economically better off than its US counterpart, has expressed concerns about whether casino jobs will be protected, post-privatization, or whether staff will be streamlined in the pursuit of efficiency.

The casinos are the town’s biggest employers, with a workforce of around 4,000.