NEW ACCOUNTING STANDARDS (Tables)

12 Months Ended

Sep. 30, 2019

Accounting Changes and Error Corrections [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

The cumulative-effect of initially adopting ASC 606 was as follows (in thousands):

	September 30, 2018		ASC 606 Adjustment			October 1, 2018
Other current liabilities	$	123,303	$	41,575		$	164,878
Retained earnings	$	250,707	$	(41,575	)	$	209,132

The impact of adopting ASC 606 was as follows (in thousands):

	Balance under ASC 606		Balance without ASC 606		Impact of Change
	September 30, 2019		September 30, 2019		Higher/ (Lower)
Other current liabilities	$	174,231	$	135,778	$	38,453
Retained earnings	$	137,124	$	175,577	$	(38,453	)

The impact of adopting ASC 606 on the accompanying consolidated statement of income for the fiscal year ended September 30, 2019 was as follows (in thousands):

						Promotional			Promotional						Gross vs. Net						Impact of
	Balance		Loyalty			Allowances			Allowances			Cash			Presentation			Balance			Change
	under		Points			(Discretionary)			(Non-Discretionary)			Giveaways			and Other			without			Higher/
	ASC 606		(1)			(2)			(2)			(3)			(4)			ASC 606			(Lower)
Revenues:
Gaming	$	936,412	$	2,688		$	(178,234	)	$	(62,678	)	$	(7,683	)	$	21,844		$	1,160,475		$	(224,063	)
Food and beverage	157,544		—			41,758			—			—			3,976			111,810			45,734
Hotel	97,235		—			24,394			—			—			676			72,165			25,070
Retail, entertainment and other	197,619		—			19,787			5,619			—			(5,785		)	177,998			19,621
Gross revenues	1,388,810		2,688			(92,295		)	(57,059		)	(7,683		)	20,711			1,522,448			(133,638		)
Less-Promotional allowances	—		—			97,343			23,505			—			2,309			(123,157		)	123,157
Net revenues	1,388,810		2,688			5,048			(33,554		)	(7,683		)	23,020			1,399,291			(10,481		)
Operating costs and expenses:
Gaming	551,738		(447		)	(21,730		)	(131,384		)	(7,683		)	22,544			690,438			(138,700		)
Food and beverage	123,814		—			26,467			41,879			—			3,926			51,542			72,272
Hotel	42,476		—			—			12,099			—			675			29,702			12,774
Retail, entertainment and other	93,335		—			311			43,852			—			(4,616		)	53,788			39,547
Advertising, general and administrative	223,716		—			—			—			—			491			223,225			491
Corporate	45,880		—			—			—			—			—			45,880			—
Depreciation and amortization	122,657		—			—			—			—			—			122,657			—
Impairment of Mohegan Sun Pocono's goodwill	39,459		—			—			—			—			—			39,459			—
Other, net	9,273		—			—			—			—			—			9,273			—
Total operating costs and expenses	1,252,348		(447		)	5,048			(33,554		)	(7,683		)	23,020			1,265,964			(13,616		)
Income from operations	$	136,462	$	3,135		$	—		$	—		$	—		$	—		$	133,327		$	3,135

The items most significantly impacted by the adoption of ASC 606 were as follows:

(1) ASC 606 modified the accounting related to loyalty points. The Company’s loyalty reward programs allow patrons to utilize their reward membership cards to earn loyalty points that are redeemable for complimentary items such as food and beverage, lodging and retail products. Under ASC 606, the Company is required to utilize a deferred revenue model to reduce gaming revenues by the estimated fair value of loyalty points earned by patrons and recognize the related revenues when such loyalty points are redeemed. The deferred revenue liability is based on the estimated SSP of loyalty points earned after factoring in the likelihood of redemption. Prior to the adoption of ASC 606, the liability for unredeemed loyalty points was estimated based on expected redemption rates and estimated costs of the goods and services to be provided.

(2) ASC 606 modified the accounting related to promotional allowances. The Company no longer recognizes revenues for complimentary items provided to patrons or for goods and services provided to patrons in connection with loyalty point redemptions as gross revenues with a corresponding offset to promotional allowances to arrive at net revenues. The majority of such amounts previously recorded within promotional allowances now offset gaming revenues based on an allocation of revenues to performance obligations utilizing SSP. These changes resulted in the elimination of promotional allowances and the reclassification of revenues between the various revenue line items.

(3) ASC 606 modified the accounting related to cash giveaways. The Company now records cash giveaways as a reduction to gaming revenues. Prior to the adoption of ASC 606, the Company recorded cash giveaways as expenses. This change resulted in decreases in both gaming revenues and expenses.

(4) ASC 606 modified gross versus net presentation related to certain fees. The Company now records mandatory service charges on food and beverage items and wide area progressive operator fees on a gross basis, with amounts received from patrons recorded as revenues and the corresponding amounts paid recorded as expenses. This change resulted in increases in both revenues and expenses.

Disaggregation of Revenue

Revenue disaggregation by geographic location and revenue type for the fiscal year ended September 30, 2019 was as follows (in thousands):

	Connecticut		Pennsylvania		Canada
	(Mohegan Sun)		(Mohegan Sun Pocono)		(MGE Niagara Resorts) (1) (2)		Other
Gaming	$	654,273	$	211,800	$	70,339	$	—
Food and beverage	114,446		22,981		20,319		(202		)
Hotel	84,543		8,246		4,451		(5		)
Retail, entertainment and other	138,781		8,027		17,416		1,206
Management, development and other	—		—		—		32,429
Net revenues	$	992,043	$	251,054	$	112,525	$	33,428

_________

(1) Represents revenues from the MGE Niagara Resorts from June 11, 2019 through September 30, 2019.

(2) Gaming revenues represent revenues earned under the COSA (refer to Note 2).

Contract with Customer

The following table summarizes these liabilities (in thousands):

	September 30, 2019		October 1, 2018
Outstanding gaming chips and slot tickets liability	$	7,968	$	3,298
Loyalty points deferred revenue liability	40,968		42,314
Patron advances and other liability	22,312		17,530
Total	$	71,248	$	63,142