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ORGANIZATION AND BASIS OF PRESENTATION
 6 Months Ended
Mar. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
ORGANIZATION AND BASIS OF PRESENTATION ORGANIZATION AND BASIS OF PRESENTATION:
Organization
The Mohegan Tribe of Indians of Connecticut (the “Mohegan Tribe”) established the Mohegan Tribal Gaming Authority in July 1995 with the exclusive authority to conduct and regulate gaming activities for the Mohegan Tribe on tribal lands and the non-exclusive authority to conduct such activities elsewhere. The Mohegan Tribe is a sovereign Indian nation with independent legal jurisdiction over its people and land. Like other sovereign governments, the Mohegan Tribe and its entities, including the Mohegan Tribal Gaming Authority, are generally not subject to federal, state or local income taxes. However, MGE Niagara Entertainment Inc. (“MGE Niagara”), a wholly-owned subsidiary, is subject to tax in Ontario, Canada, and certain non-tribal entities are subject to state or local income taxes in the United States.
The Mohegan Tribal Gaming Authority d/b/a Mohegan Gaming & Entertainment (the “Company”) is primarily engaged in the ownership, operation and development of integrated entertainment facilities, both domestically and internationally. This ownership, operation and development includes the following: (i) ownership and operation of Mohegan Sun, a gaming and entertainment complex located on an approximately 196-acre site in Uncasville, Connecticut, (ii) ownership and operation of Mohegan Sun Pocono, a gaming and entertainment facility located on an approximately 400-acre site in Plains Township, Pennsylvania, (iii) operation of the Niagara Fallsview Casino Resort, Casino Niagara and the 5,000-seat Niagara Falls Entertainment Centre under a Casino Operating and Services Agreement (the “Casino Operating and Services Agreement”), all in Niagara Falls, Canada (collectively, the “MGE Niagara Resorts”), (iv) development and management of ilani Casino Resort in Clark County, Washington, and development rights to any future development at ilani Casino Resort, (v) management of Resorts Casino Hotel in Atlantic City, New Jersey and ownership of 10% of the casino’s holding company and its subsidiaries, including those conducting or licensing online gaming and retail sports wagering in New Jersey, (vi) management of Paragon Casino Resort in Marksville, Louisiana, (vii) operation of the Mohegan Sun Casino at Virgin Hotels Las Vegas (“Mohegan Sun Las Vegas”) in Las Vegas, Nevada, (viii) development and construction of an integrated resort and casino project to be located adjacent to the Incheon International Airport in South Korea and (ix) development and construction of an integrated resort and casino project to be located near Athens, Greece.
Impact of the COVID-19 Pandemic
In March 2020, the World Health Organization declared the outbreak of COVID-19 a global pandemic and the United States federal government declared it a national emergency. The spread of COVID-19 has affected most segments of the global economy, including the Company’s operations. In March 2020, the Company temporarily suspended operations at its North American owned, operated and managed properties to ensure the health and safety of its employees, guests and the surrounding communities in which the Company operates, consistent with directives from various government bodies. Following these closures, the Company reopened its properties as follows: (i) Paragon Casino Resort on May 20, 2020, (ii) ilani Casino Resort on May 28, 2020, (iii) Mohegan Sun on June 1, 2020, (iv) Mohegan Sun Pocono on June 22, 2020 and (v) Resorts Casino Hotel on July 2, 2020. Mohegan Sun Pocono was again temporarily closed from December 12, 2020 through January 3, 2021 due to a resurgence of COVID-19 at that time. In addition, Mohegan Sun Las Vegas opened to the public on March 25, 2021 under capacity restrictions due to COVID-19. As of the date of the filing of this Quarterly Report on Form 10-Q, the MGE Niagara Resorts remain temporarily closed.
The Company cannot predict when the MGE Niagara Resorts will be able to reopen or the conditions upon which such reopening may occur, and while the Company's reopened properties have experienced some level of continued business disruption, the Company expects that these disruptions will gradually dissipate, and remains confident in its ability to mitigate the impact of any such disruption through expense management. The impact of COVID-19 on the Company's operations has been significant, though the full extent of its impact will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of COVID-19 or the extent of any resurgence of COVID-19, the manner in which the Company’s guests, suppliers and other third parties respond to COVID-19, including the perception of safety and health measures taken by the Company, new information which may emerge concerning the severity of COVID-19 and the actions to contain or treat it, as well as general economic conditions and consumer confidence. Accordingly, the Company cannot reasonably estimate the extent to which COVID-19 will further impact its future financial condition, results of operations and cash flows.
The Company could experience other potential adverse impacts as a result of COVID-19, including, but not limited to, charges from further adjustments to the carrying value of its intangible assets, as well as other long-lived asset impairment
charges. Actual results may differ materially from the Company’s current estimates as the scope of COVID-19 evolves, depending largely, but not exclusively, on the duration and extent of the Company’s business disruptions.

In accordance with Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the accompanying condensed consolidated financial statements are issued. As further discussed within Note 3, on January 26, 2021, the Company (i) entered into a new credit agreement which, among other things, provided for an approximately $262.9 million senior secured revolving credit facility, removed the financial covenants (other than a minimum liquidity covenant) applicable for the fiscal quarter ended December 31, 2020, modified the financial covenants applicable for the fiscal quarters ending March 31, 2021 and thereafter and extended the maturity date of the new senior secured revolving credit facility to April 14, 2023 and (ii) issued approximately $1.2 billion of new senior secured notes due February 1, 2026. The proceeds from these transactions were used to refinance certain existing indebtedness of the Company (refer to Note 3). Based on the aforementioned and the Company’s existing resources, there are no current indicators of substantial doubt as previously disclosed in the Company's Annual Report filed on Form 10-K for the fiscal year ended September 30, 2020, and the Company expects to have sufficient resources to meet its existing obligations for the next twelve months and to remain in compliance with its financial covenants.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and with instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In accordance with Rule 10-01, the accompanying unaudited condensed consolidated financial statements do not include all of the information and footnotes required by US GAAP for complete consolidated financial statements. The accompanying year-end condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by US GAAP. All adjustments, including normal recurring accruals and adjustments, necessary for a fair statement of the Company's operating results for the interim period, have been included.
The Company’s results for the three months and six months ended March 31, 2021 are not indicative of operating results expected for the entire fiscal year, particularly given the impact of COVID-19 as discussed above.
    The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2020. The preparation of financial statements in conformity with US GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities.
Mohegan Sun Las Vegas
The Company owns 100% of MGNV, LLC (“MGNV”), which was formed to operate Mohegan Sun Las Vegas. In July 2019, MGNV entered into a casino lease agreement with JC Hospitality, LLC, which developed the former Hard Rock Hotel and Casino in Las Vegas, Nevada, into an integrated resort under the Virgin Hotels brand, which includes Mohegan Sun Las Vegas. Pursuant to the lease agreement, MGNV leases and operates the more than 60,000-square-foot gaming facility at the integrated resort. On March 25, 2021, Mohegan Sun Las Vegas opened to the public. During the initial term of this 20-year lease agreement, the Company is required to make annual minimum rent payments of $9.0 million, subject to escalators which could result in annual minimum rent payments of up to $15.0 million, plus consumer price index inflators and additional common area maintenance fees. Annual minimum rent payments commence upon the first anniversary of the Lease Commencement Date, as defined under the lease agreement, and continue until the end of the lease term, which concludes in 2041, subject to additional extensions at MGNV's option. This lease is classified as a finance lease. Accordingly, the Company recorded a related right-of-use (“ROU”) finance lease asset and liability.
Revenue Disaggregation
    The Company is primarily engaged in the ownership, operation and development of integrated entertainment facilities both domestically and internationally. The Company’s current wholly-owned operations are primarily focused within Connecticut and Pennsylvania. The Company also currently operates and manages other gaming facilities elsewhere within the United States and Canada. The Company generates revenues by providing the following types of goods and services: gaming, food and beverage, hotel, retail, entertainment and other and management and development.
Revenue disaggregation by geographic location and revenue type was as follows (in thousands):
For the Three Months Ended March 31, 2021
ConnecticutPennsylvaniaNevadaCanada
(Mohegan Sun)(Mohegan Sun Pocono)
(Mohegan Sun
 Las Vegas) (1)
(MGE
Niagara Resorts) (2)
Other
Gaming $145,965 $49,019 $1,515 $12,685 $— 
Food and beverage12,047 1,132 177 — (13)
Hotel16,088 1,093 — — (11)
Retail, entertainment and other14,922 1,132 23 1,131 2,581 
Management and development
— — — — 18,594 
Net revenues
$189,022 $52,376 $1,715 $13,816 $21,151 
________
(1)Mohegan Sun Las Vegas opened to the public on March 25, 2021.
(2)Gaming revenues represent revenues earned under the Casino Operating and Services Agreement.
For the Three Months Ended March 31, 2020
ConnecticutPennsylvaniaNevadaCanada
(Mohegan Sun)(Mohegan Sun Pocono)
(Mohegan Sun
Las Vegas) (1)
(MGE
Niagara Resorts) (2)
Other
Gaming $124,721 $45,409 $— $45,864 $— 
Food and beverage21,422 4,586 — 11,591 (42)
Hotel15,875 1,484 — 2,756 — 
Retail, entertainment and other20,268 1,623 — 11,071 162 
Management and development
— — — — 8,454 
Net revenues
$182,286 $53,102 $— $71,282 $8,574 
________
(1)Mohegan Sun Las Vegas did not open to the public until March 25, 2021.
(2)Gaming revenues represent revenues earned under the Casino Operating and Services Agreement.
For the Six Months Ended March 31, 2021
ConnecticutPennsylvaniaNevadaCanada
(Mohegan Sun)(Mohegan Sun Pocono)
(Mohegan Sun
Las Vegas) (1)
(MGE
Niagara Resorts) (2)
Other
Gaming $270,990 $84,661 $1,515 $25,219 $— 
Food and beverage22,252 1,973 177 — (19)
Hotel31,808 1,897 — — (11)
Retail, entertainment and other29,863 1,930 23 1,594 2,817 
Management and development
— — — — 31,909 
Net revenues
$354,913 $90,461 $1,715 $26,813 $34,696 
________
(1)Mohegan Sun Las Vegas opened to the public on March 25, 2021.
(2)Gaming revenues represent revenues earned under the Casino Operating and Services Agreement.
For the Six Months Ended March 31, 2020
ConnecticutPennsylvaniaNevadaCanada
(Mohegan Sun)(Mohegan Sun Pocono)
(Mohegan Sun
Las Vegas) (1)
(MGE
Niagara Resorts) (2)
Other
Gaming $284,980 $97,387 $— $97,896 $— 
Food and beverage49,955 10,668 — 27,544 (78)
Hotel37,923 3,464 — 6,319 (2)
Retail, entertainment and other52,763 3,537 — 24,497 308 
Management and development
— — — — 17,466 
Net revenues
$425,621 $115,056 $— $156,256 $17,694 
________
(1)Mohegan Sun Las Vegas did not open to the public until March 25, 2021.
(2)Gaming revenues represent revenues earned under the Casino Operating and Services Agreement.
Contract and Contract-related Assets
As of March 31, 2021 and September 30, 2020, contract assets related to the Casino Operating and Services Agreement totaled $132.0 million and $129.2 million, respectively.
Contract and Contract-related Liabilities
A difference may exist between the timing of cash receipts from patrons and the recognition of revenues, resulting in a contract or contract-related liability. In general, the Company has three types of such liabilities: (1) outstanding gaming chips and slot tickets liability, which represents amounts owed in exchange for outstanding gaming chips and slot tickets held by patrons, (2) loyalty points deferred revenue liability and (3) patron advances and other liability, which primarily represents funds deposited in advance by patrons for gaming and advance payments by patrons for goods and services such as advance ticket sales, deposits on rooms and convention space and gift card purchases. These liabilities are generally expected to be recognized as revenues within one year and are recorded within other current liabilities.
The following table summarizes these liabilities (in thousands):
March 31, 2021September 30, 2020
Outstanding gaming chips and slot tickets liability
$9,104 $7,623 
Loyalty points deferred revenue liability
37,333 35,368 
Patron advances and other liability
19,556 17,340 
Total
$65,993 $60,331 
As of March 31, 2021 and September 30, 2020, customer contract liabilities related to Mohegan Sun Pocono's revenue sharing agreement with Unibet Interactive Inc. totaled $16.2 million and $16.8 million, respectively, and were primarily recorded within other long-term liabilities.

Fair Value of Financial Instruments
The Company applies the following fair value hierarchy, which prioritizes the inputs utilized to measure fair value into three levels:
•Level 1 - Quoted prices for identical assets or liabilities in active markets;
•Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets or valuations based on models where the significant inputs are observable or can be corroborated by observable market data; and
•Level 3 - Valuations based on models where the significant inputs are unobservable. The unobservable inputs reflect the Company's estimates or assumptions that market participants would utilize in pricing such assets or liabilities.
The Company's assessment of the significance of a particular input requires judgment and may affect the valuation of financial assets and liabilities and their placement within the fair value hierarchy.
    The carrying amount of cash and cash equivalents, restricted cash and cash equivalents, receivables and trade payables approximates fair value. The estimated fair values of the Company's long-term debt were as follows (in thousands):
 March 31, 2021
 Carrying ValueFair Value
New senior secured credit facility - revolving (1)
$107,000 $105,529 
Line of credit (1)
16,015 15,795 
2021 8% senior secured notes (1)
1,156,117 1,180,875 
2016 7 7/8% senior unsecured notes (1)
492,691 520,000 
MGE Niagara Resorts credit facility - revolving (1)
27,794 27,794 
MGE Niagara Resorts credit facility - term loan (1)
71,618 71,618 
MGE Niagara Resorts convertible debenture (2)
31,764 31,764 
Mohegan Expo credit facility (3)
26,725 27,159 
Guaranteed credit facility (3)
28,369 29,094 
Redemption note payable (3)
61,330 61,330 
Other (3)
3,661 3,661 
Long-term debt
$2,023,084 $2,074,619 
________
(1)Estimated fair values were based on Level 2 inputs (quoted market prices or prices of similar instruments) as of March 31, 2021.
(2)Estimated fair value was based on Level 3 inputs (changes in market conditions) from date of issuance (June 11, 2019) to March 31, 2021.
(3)Estimated fair values were based on Level 3 inputs (present value of future payments discounted to carrying value) as of March 31, 2021.
New Accounting Standards
The following accounting standards were adopted during the six months ended March 31, 2021:
ASU 2016-13
In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurements of Credit Losses on Financial Instruments” (“ASU 2016-13”), which sets forth a current expected credit loss model requiring a company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. This model replaced the prior incurred loss model and applies to the measurement of credit losses on financial assets measured at amortized cost, as well as certain off-balance sheet credit exposures. Effective October 1, 2020, the Company adopted ASU 2016-13 and its adoption did not have a material impact on the Company's financial statements.
ASU 2018-13
In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”), which added, amended and removed certain disclosure requirements related to fair value measurements. ASU 2018-13 requires enhanced disclosures on valuation techniques and inputs that a reporting entity uses to determine its measures of fair value, including judgments and assumptions that the entity makes and the uncertainties in the fair value measurements as of the reporting date. Effective October 1, 2020, the Company adopted ASU 2018-13 and its adoption did not have a material impact on the Company's financial statement disclosures.
The following accounting standards will be adopted in future reporting periods:
ASU 2019-12
In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), which simplifies various aspects related to the accounting for income taxes. This new standard removes certain exceptions to the general principles in ASU 2019-12 and clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for annual reporting periods beginning after December 15, 2020. The Company is currently evaluating the impact ASU 2019-12 will have on its financial statements, but does not expect its adoption to have a material impact.
ASU 2020-06
In August 2020, the FASB issued ASU 2020-06, “Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40)” (“ASU 2020-06”), which simplifies the
accounting for convertible instruments by removing major separation models required under current guidance. ASU 2020-06 also removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for annual reporting periods beginning after December 15, 2021, including interim periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact ASU 2020-06 will have on its financial statements and related disclosures, but does not expect its adoption to have a material impact.