Mohegan Tribal Gaming Results Up - Thursday 27th of April 2006

UNCASVILLE, Connecticut – (PRESS REELASE) The MoheganTribal Gaming Authority, or the Authority, the operator of a gaming andentertainment complex located near Uncasville, Connecticut, known asMohegan Sun, and a harness racetrack located in Plains Township,Pennsylvania, known as Mohegan Sun at Pocono Downs, or Pocono Downs,announced today its operating results for the quarter ended March 31, 2006.

Results for the quarter ended March 31, 2006 were as follows:

* Record second quarter gaming revenues of $303.9 million, a 6.9% increase over the corresponding period in the prior year

* Gross slot revenues of $216.7 million, a 7.9% increase over the corresponding period in the prior year

* Table games revenues of $84.9 million, a 4.7% increase over the corresponding period in the prior year

* Non-gaming revenues of $59.5 million, a 7.1% increase over the corresponding period in the prior year

* Income from operations of $64.2 million, a 10.7% increase over the corresponding period in the prior year

* Net income of $34.8 million, a 23.0% increase over the corresponding period in the prior year

* Record second quarter Adjusted EBITDA, a non-GAAP measure more fully described below, of $87.7 million, a 9.1% increase over the corresponding period in the prior year

Second Quarter Operating Results

Net income for the quarter ended March 31, 2006 increased by $6.5million, or 23.0%, to $34.8 million compared to $28.3 million for the sameperiod in the prior year. The increase in net income is primarily due to a$9.1 million increase in income from operations at Mohegan Sun as describedbelow.

Adjusted EBITDA for the quarter ended March 31, 2006 increased by $7.3million, or 9.1%, to $87.7 million compared to $80.4 million for the sameperiod in the prior year. The Adjusted EBITDA margin (Adjusted EBITDA as apercentage of net revenues) for the quarter ended March 31, 2006 was 26.1%compared to a 25.7% Adjusted EBITDA margin for the same period in the prioryear. The increase in the Adjusted EBITDA margin for the quarter endedMarch 31, 2006 was primarily attributable to the increase in the AdjustedEBITDA margin for Mohegan Sun as described below.

Interest expense increased by $500,000 to $22.8 million for the quarterended March 31, 2006 as compared to $22.3 million for the same period inthe prior year due to increases in weighted average outstanding debt andweighted average interest rate. The weighted average outstanding debt was$1.25 billion for the quarter ended March 31, 2006 versus $1.23 billion forthe quarter ended March 31, 2005. The weighted average interest rate was7.4% for the quarter ended March 31, 2006 compared to 7.2% for the sameperiod in the prior year.

"Our operating results for the quarter are remarkable," said BruceBozsum, Chairman of the Mohegan Tribal Gaming Authority, "The ManagementBoard is extremely pleased with the continuing success of our propertiesand acknowledges that a great deal of the success is the result of theoutstanding work of all our employees."

Mohegan Sun

Adjusted EBITDA at Mohegan Sun for the quarter ended March 31, 2006increased by $8.6 million, or 10.4%, to $91.2 million compared to $82.6million for the same period in the prior year. The Adjusted EBITDA marginat Mohegan Sun for the quarter ended March 31, 2006 was 27.8% compared to a27.0% Adjusted EBITDA margin for the same period in the prior year. TheAdjusted EBITDA margin increase is attributable to decreased marketingcosts as a percentage of gaming revenues, greater employee productivity,and increases in revenues in our gaming and non-gaming offerings.

"We could not be more pleased with the quarter," commented MitchellEtess, Mohegan Sun President and CEO, referring to the results of MoheganSun for the quarter ended March 31, 2006, "As our market continues toexperience steady growth, our variety of gaming and entertainmentattractions, combined with outstanding customer service from our staff, hasenabled us to continue to capture more and more share of the Connecticutslot market."

Net revenues for the quarter ended March 31, 2006 increased by $22.2million, or 7.2%, to $328.7 million from $306.5 million for the same periodin the prior year. This increase is the result of a 6.6% growth in gamingrevenues and a 6.9% growth in non-gaming revenues at Mohegan Sun.

Gross slot revenues, which the Authority also refers to as gross slotwin, for the quarter ended March 31, 2006 increased by $15.8 million, or7.9%, to $216.7 million from $200.9 million for the same period in theprior year. The State of Connecticut reported slot revenues of $413.1million and $392.4 million for the quarters ended March 31, 2006 and 2005,respectively, representing an increase of 5.3%. Mohegan Sun increased itsslot market share to 52.5% of the Connecticut market versus 51.2% in thequarter ended March 31, 2005. Gross slot hold percentage, or gross slotrevenues divided by slot handle, for the quarter ended March 31, 2006 was8.8% compared to 8.6% for the same period in the prior year. Gross slot winper unit per day was $388 and $357 for the quarters ended March 31, 2006and 2005, respectively.

Table games revenues for the quarter ended March 31, 2006 increased by$3.9 million, or 4.7%, to $84.9 million from $81.0 million for the sameperiod in the prior year. Table games hold percentage, or table gamesrevenues divided by table games drop, was 15.0% and 16.0% for the quartersended March 31, 2006 and 2005, respectively. Table games hold percentage isrelatively predictable over long periods of time but can fluctuatesignificantly over shorter periods. Table games revenue per unit per daywas $3,151 and $3,110 for the quarters ended March 31, 2006 and 2005,respectively.

Food and beverage revenues increased by $1.8 million, or 9.0%, to $22.2million for the quarter ended March 31, 2006 from $20.4 million for thesame period in the prior year. The increase in revenues is primarilyattributable to a 5.9% increase in the number of meals served, or foodcovers, partially due to the opening of the 285-seat Uncas American IndianGrill to the public in July 2005.

Hotel revenues increased by $100,000, or 0.7%, to $11.6 million for thequarter ended March 31, 2006 from $11.5 million for the same period in theprior year. Hotel occupancy decreased slightly to 90.4% for the quarterended March 31, 2006 compared to 90.6% for the quarter ended March 31,2005. The average daily room rate, or ADR, of $114 for the quarter endedMarch 31, 2006 was consistent with ADR for the same period in the prioryear. Revenue per Available Room, or REVPAR, of $103 for the quarter endedMarch 31, 2006 also was consistent with REVPAR for the same period in theprior year.

Retail, entertainment and other revenues increased by $1.8 million, or8.1%, to $24.9 million for the quarter ended March 31, 2006 from $23.1million for the same period in the prior year. The increase is mostlyattributable to entertainment revenues, which increased by $3.4 million or67.9%. During the period, the Mohegan Sun Arena had a 20.7% increase inticket sales and a 43.8% in average ticket price because of the largenumber of headliner shows at the Arena. Retail revenues decreased by $1.3million due to a redirection of promotions offered to casino patrons.

Income from operations for the quarter ended March 31, 2006 increasedby $9.1 million, or 14.9%, to $70.0 million from $60.9 million for thequarter ended March 31, 2005.

Mohegan Sun at Pocono Downs

Adjusted EBITDA for the quarter ended March 31, 2006 decreased by $1.0million to $(329,000) compared to $738,000 for the same period in the prioryear. The Adjusted EBITDA margin for the quarter ended March 31, 2006 was(4.4)% compared to a 11.8% Adjusted EBITDA margin for the same period inthe prior year. Racing revenues for the quarter ended March 31, 2006 increased by $1.2million, or 19.7%, to $6.8 million from $5.6 million for the same period inthe prior year. The increase in racing revenues is due to a full period ofoperations for the quarter ended March 31, 2006. The quarter ended March31, 2005 included only racing revenues from January 25, 2005 (the date ofacquisition of the facility) to the end of the quarter.

Net revenues for the quarter ended March 31, 2006 increased by $1.3million, or 20.1%, to $7.5 million from $6.2 million for the same period inthe prior year. This increase is the result of a full period of operationsas discussed above.

Loss from operations for the quarter ended March 31, 2006 was $1.9million compared to income from operations of $182,000 for the same periodin the prior year. The loss from operations for the quarter ended March 31,2006 includes $949,000 in pre-opening costs and expenses comprised ofpersonnel, consulting and other costs related to the development plansdescribed below.

In December 2005, Downs Racing, LP, a subsidiary of the Authority thatowns and operates Mohegan Sun at Pocono Downs, submitted applications for aconditional and permanent Category One Slot Machine License with thePennsylvania Gaming Control Board, or PGCB. Upon receipt of a conditionalor permanent license, Downs Racing, LP will be required to pay a one-time$50.0 million licensing fee to the Commonwealth of Pennsylvania. Asrequired by the PGCB, the Authority delivered to the PGCB a letter ofcredit in the amount of $50.0 million as security for Downs Racing, LP'sfuture license fee payment. The PGCB announced that the date for a publichearing on the slot machine license application for Mohegan Sun at PoconoDowns will be April 27, 2006.

In anticipation of receipt of a slot machine license, Downs Racing, LPis making significant improvements and additions at Mohegan Sun at PoconoDowns, including a new state of the art simulcast facility, which opened tothe public on March 13, 2006, improvements to the grandstand for theinstallation of approximately 1,080 slot machines, a new 10,000 square footfood court and road and parking infrastructure enhancements. The Authorityis providing updated guidance on the cost of these improvements which arenow estimated to be approximately $70.0 million or $23.0 million greaterthan the previously estimated amount of $47.0 million. This estimateincludes the procurement and related implementation costs associated withnew business systems for the planned slot facility and other infrastructurerelated improvements expected to be incorporated into the future casinodevelopment at the site. Construction of these improvements is estimated tobe completed by the summer of 2006.

The Authority previously announced plans for the development of a new400,000 square foot gaming and entertainment facility to be constructed onthe existing grounds of Mohegan Sun at Pocono Downs. The plans, the scopeand timing of such development continue to be refined through our rigorousplanning process. Our current plans for such development provide for acombined total of approximately 2,000 slot machines, 3 full-servicerestaurants, a 300 seat buffet, a 15,000 square foot food court, severalbars and lounges, an 18,000 square foot nightclub, a "Kid's Quest" center,20,000 square feet of retail space, additional parking and an enhancedemployee service area. Construction of the new facility is expected tobegin following the issuance of a Category One Slot Machine License by thePGCB, which is currently anticipated to occur in late summer or early fall2006. The opening date of the new facility is projected to be approximately14 months from the beginning of construction. The Authority also isproviding updated guidance on the construction of the new facility which isnow estimated to be approximately $135.0 million lower than thepreviously estimated range of $140.0 million to $160.0 million.

The Authority anticipates that it will seek an amendment to itsexisting bank credit facility to increase spending levels for Pocono Downsprior to the start of construction of the new facility.

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