UNCASVILLE, Conn. – As the Mohegan Tribal Gaming Authority announced record second quarter gaming revenues, William J. Velardo announced his resignation after an 11-year stint as CEO of the Mohegan Tribal Gaming Authority.
Velardo, the first head of the gaming authority, arrived in Uncasville in 1995 and helped establish and develop the tribe’s Mohegan Sun into one of the world’s most successful casinos.
He led the tribe’s development of Mohegan Sun’s $1.1 billion expansion in 2001 and spearheaded the tribe’s off-reservation corporate expansion into other states, including the $280 million purchase of the Pocono Downs harness racing track in Pennsylvania, where the tribe awaits a slot machine license.
The tribe also has development partnerships with the Cowlitz Indian Tribe in Washington state and the Menominee Indian Tribe of Wisconsin in Kenosha, Wis.
Velardo earned $1.1 million and a bonus of almost $375,000 last year. He will move back to his hometown of Las Vegas, where he will be closer to family members and take a job with a casino.
“Bill has been with the authority since we began our gaming operation at Mohegan Sun and has helped guide us to a pre-eminent position in the U.S. gaming market,” said Mohegan Tribal Chairman Bruce “Two Dogs” Bozsum. “He has overseen tremendous growth in our operations, led our diversification activities and has helped to put in place a superior management team that will continue to serve the authority very well over the coming years.”
Velardo’s resignation caused a shuffle at the top. Mitchell Grossinger Etess, the current president and CEO of Mohegan Sun, will assume additional duties as CEO of the authority. Etess has been with the authority since 1995 and has more than 25 years of experience in the gaming and hospitality industries.
Jeffrey Hartmann, current executive vice president and chief operating officer at Mohegan Sun, will assume additional responsibilities as chief operating officer of the authority. Hartmann joined the authority in 1996 following a stint with Foxwoods Casino.
Leo Chupaska, the current chief financial officer of the Mohegan Tribal Gaming Authority, will additionally assume the position of chief financial officer of Mohegan Sun, which has been vacant since last December.
Velardo’s resignation was announced April 26, the same day the authority released its report on second quarter fiscal 2006 earnings.
Highlights from the report include the following earnings for the quarter ending March 31, each representing a percent increase over the correspondent period last year:
* Record second quarter revenues of $303.9 million, a 6.9 percent increase;
* Gross slot revenues of $216.7 million, a 7.9 percent increase;
* Table game revenues of $84.9 million, a 4.7 percent increase;
* Non-gaming revenues of $59.5 million, a 7.1 percent increase;
* Income from operations of $64.2 million, a 10.7 percent increase;
* Net income of $34.8 million, a 23 percent increase; and
* Record second quarter adjusted EBITDA (earnings before interest taxes depreciation and amortization), a non-GAAP (generally accepted accounting principles) measures of $87.7 million, a 9 percent increase.
The net income of $34.7 million compared to $28.3 million for the same period last year and comes primarily from a $9.1 million increase in income from Mohegan Sun.
Gross slot machine revenues rose $15.8 million, or 7.9 percent, from $200.9 million for the same period last year. The Mohegans and the Mashantucket Pequots, who own and operate Foxwoods, the state’s other tribal casino, contribute 25 percent of their slot revenues to the state.
The state of Connecticut reported slot revenues of $413.1 million and $392.4 million for the first quarters of this year and last year, respectively. Mohegan Sun increased its slot machine share to the state to 52.5 percent of the Connecticut market, out-earning Foxwoods by 5 percent.
Interest expense increased $500,000 to $22.8 million. The tribe carried a weighted average outstanding debt of $1.25 billion for the period that ended March 31. The weighted average interest rate was 7.4 percent for the quarter, compared to 7.2 percent last year.
“Our operating results for the quarter are remarkable,” Bozsum said. “The management board is extremely pleased with the continuing success of our properties and acknowledges that a great deal of the success is the result of the outstanding work of all our employees,” Bozsum said.
As of March 31, the authority held cash and cash equivalents of $81.5 million, an increase of $9.1 million as of Sept. 30, 2005.
If the tribe receives a slot permit for its Pocono Downs facility, the authority plans to install 1,080 slot machines, a 10,000-square-foot food court and improve roads and parking. The improvements will cost approximately $70 million – $23 million more than previously estimated.
The authority will likely ask its bank to increase its spending levels for the project.