Q&A: Mohegan Gaming & Entertainment CEO on the tribe's pursuit of igaming and sports betting success

With their entitlement to operate gaming guaranteed under the 1988 Indian Gaming Regulatory Act (IGRA), Native American tribes have enjoyed a strong foundation and clearer trajectory towards igaming and sports betting than some of their non-tribal counterparts. Yet of the 251 tribes (according to October 2021 data from the National Indian Gaming Commission) operating gambling establishments in the US, the number with igaming and sports betting can be counted on one hand.

One tribal trendsetter is the Mohegan Tribe, whose Connecticut-based Mohegan Sun brand has blazed a trail into igaming, and most recently sports betting, that serves as a model for tribal operators everywhere. Mohegan Gaming & Entertainment president and CEO Ray Pineault speaks to EGR North America about the unique journey the tribe has undertaken in its path to success.

EGR North America (EGR NA): What are the biggest challenges as a tribal gaming operator in the US market?

Ray Pineault (RP): I don’t think there’s any challenge as a tribal operator that we face unique to us — we’re regulated like any other commercial operator. We’ve got commercial operations in New Jersey, Las Vegas, as well as Pennsylvania, so we face many of the same challenges that your average commercial operators will face.

Covid-19 has obviously been the biggest challenge facing everybody over the last 12-19 months, so things like supply chain issues have been difficult — can you get the products you need? Can you get them quickly? Can you get them cost-effectively?

And things like competition for labor. There’s been labor shortages throughout the United States. In the resort and hospitality industry, they are calling it the great resignation. There’s a large portion of the labor force resigning from their jobs and moving on to other things or finding different things to do. We’re always worried about new competition as new competitors enter the market, how we deal with them and stay ahead of the competition. So, our challenges are substantially, in all material respects, similar to a commercial operator and we work through them on a day-to-day basis.

EGR NA: Where does Mohegan Gaming & Entertainment see itself in terms of the US market?

RP: From a digital footprint perspective, we’re just dipping our toes in the water. We have launched in Connecticut [and although] we’ve only been live for three months, we’ve had tremendous success. We’re very pleased with the results that we’re seeing. We’re looking at Canada, particularly in Niagara where we have two properties, and we have a huge database to launch right from the Niagara property.

We’re looking at other digital jurisdictions in the United States, including bordering states such as Massachusetts, and we already operate in Las Vegas and Pennsylvania. From a bricks-and-mortar perspective, we first opened as a small little travel casino in south-eastern Connecticut in 1996 with 2,000 slot machines and 100 table games. Since then, we’ve grown to a facility with over 3,500 slot machines, over 200 table games, an arena, 1,600 hotel rooms, and a convention space. We’ve added Niagara, Pocono, New Jersey, Washington, along with South Korea to our portfolio, so I see us as a competitor in the gaming market — one that’s going to continue to look for opportunities for growth and expansion and bring our form of hospitality to the resort industry.

EGR NA: Much was made in the press about Connecticut’s sports betting soft launch issues. Can you shed any light on the matter?

RP: Contrary to those reports, we didn’t really face any challenges from the soft launch. As with any state, Connecticut’s launch was their first foray into sports betting and online gaming, so the regulator wanted to make sure it was working in accordance with the regulations they had set and that was going to provide them with the reports and information they wanted to see.

We only had limited time to launch. As part of it, we reached out to a limited number of guests wanting to make sure the experience was right and that the state was comfortable with how it was operating. We had to obviously work with the state and with our partners, as well as our competitors at Foxwoods and DraftKings, to ensure we were able to launch. The amount of effort between our partners at FanDuel and our teammates here was incredible. They worked tirelessly to get it up and running in and around the 90-day period. Everybody worked very well together to get this up and running very quickly.

EGR NA: What assistance did you receive from authorities in Connecticut during this process?

RP: We’ve had lots of support from the state during that period, and indeed continuing to this day, as they are our partners in this and we have a lot of the same objectives. They want to create jobs while we want to generate revenue and provide something for the local community in terms of entertainment options, and obviously we both want to boost tax revenue for the state. We both have a vested interest in rolling this out and making sure it’s successful.

On a day-to-day basis, we have regular discussions with the Department of Consumer Protection, as well as with state leadership to ensure we’re providing an experience to our guests which is well received.

EGR NA: How have Connecticut residents embraced sports betting? Has anything surprised you about customer habits/preferences?

RP: There’s not been any surprises in how [bettors] are going about sports wagering. From a bricks-and-mortar perspective, we’re seeing what we expected, which is the majority of bets are placed at kiosks and not betting windows. The one thing we expected, and this is typical in many US local jurisdictions, is that people bet heavily on their home teams. From a receptivity standpoint, our guests have been highly enthusiastic about our new sportsbook offering. We do not have our permanent sportsbook open, yet we’ve been using a temporary facility at one of our sports bars. We look forward to opening up our full sports facility in the coming months. I know there’s a lot of excitement around doing that in combination with FanDuel, and our guests can’t wait for it to happen.

EGR NA: In tandem with sports betting in Connecticut, you have Mohegan Sun online casino sites. Are there any potential cross-sell opportunities with these two businesses?

RP: Absolutely, and we’re already doing it. We actually launched it with that in mind, so bricks and mortar was going to support online and vice versa.

As an example, when we first launched this, the first place we went to was our database. We probably own the largest database in the state of Connecticut and we utilize the bricks-and-mortar database to introduce people to our online offerings using the bricks-and-mortar space to set up online registration areas. We did some unique events on-property around registering people to join the online gaming experience, so we could have that omni-channel interaction and approach to our guests.

We are also in the process of integrating our rewards earnings online and on-premise, so it will be the same rewards program you can use to redeem things online such as credits to play or redeem items on-property. So, we think they’re going to be working symbiotically moving forward. It’s similar to the MGM rewards program but we call ours the Momentum program, and we’re launching it online as it’s already in our bricks-and-mortar properties.

EGR NA: How does the tribal exclusivity on your Connecticut compact help MGE with sports betting?

RP: There are two tribes here in Connecticut: The Mohegan Tribe and the Mashantucket Pequot Tribe. Both tribes have negotiated a compact with the state of Connecticut, which gives them exclusivity over gaming and the ability to introduce sports wagering. This was part of our compact negotiations with the state and something that’s allowed us to create the conditions for a limited market. There are only three permitted sportsbooks: The two tribes and Rush Street Interactive, working in combination with the Connecticut Lottery Corporation. That’s it and that’s all it’ll ever be. There are only two online casinos allowed in the state, one through the Mohegan Sun skin and one through the Foxwoods skin.

I think the compact and having negotiated that exclusivity allowed us to have that closed market, which will allow us to compete head-to-head, rather than as we’ve seen in other states, where you have 15, 20, 25 operators competing with each other, overspending in promotions, and not really driving profitability. In contrast, we can compete head-to-head and run profitable operations from the get-go.

EGR NA: You famously discontinued Mohegan’s sports betting platform agreement with Kambi in favor of signing a separate agreement with US market leader FanDuel. Can you explain the rationale behind this move?

RP: We did an evaluation of the market and our competitors, and when we looked at the market for Connecticut, we decided FanDuel was the best option for us to go forward. Our relationship with Kambi is fantastic. We’re already looking to work with them in other jurisdictions or for them to help us expand into others, so Kambi is going to continue to be a partner of ours. It just wasn’t the right fit for the Connecticut market.

EGR NA: How would you characterize your relationship with FanDuel?

RP: It’s fantastic. I think we’re both learning a little bit. We’re learning because we’ve only been in the digital mobile gaming market for six to nine months here in Connecticut. FanDuel was built as a B2C operator and they’re operating as a B2B operator with us, so we’re both learning.

Our relationship has the right principles moving forward and is founded on building the best operation we can. We both have similar goals and objectives. We talk on a regular basis; our president of digital is working with them regularly to make sure we’re maximizing our opportunities with our partners.

EGR NA: There has been data to suggest New Yorkers are traveling to Connecticut to place bets. Is this something you’ve encountered since the launch?

RP: I haven’t investigated how many bets are specifically placed by New Yorkers. However, we share a border with New York, Massachusetts, and Rhode Island, and I can tell you that we’re seeing wagers from all three states sharing that border. When you look at our bricks-and-mortar facility, a good percentage of our guests come from New York, Massachusetts, and Rhode Island. I fully suspect this will continue, particularly when we add in our rewards program.

I’m sure those guests that are already guests of ours to the bricks-and-mortar property will see the advantage of continuing to earn points from their play on our digital site that can be utilized in the bricks-and-mortar site when they come to visit us.

EGR NA: What lessons have you taken from your experiences in the New Jersey market that can be transposed to Connecticut, and more widely should greater Mohegan expansion occur?

RP: The one advantage we had in being in the New Jersey market, and being partners with the New Jersey operation, is we got to see it from the ground up. As soon as PASPA was overturned, they [New Jersey] were one of the first to enter the market. We were able to see what the platforms were, what the customers’ expectations were, and what the operations were going to be. We could see what it took to get the operations up and going, what the platforms could provide, what we needed to improve upon, their challenges, where we could do better, and continue to improve the market. It gave us a great bird’s eye view of how to set this up and operate a successful business.

EGR NA: What would be the one lesson you, as a tribal gaming operator, would impart to other tribes eyeing potential expansion into igaming?

RP: I think the most important thing I would tell any tribe or any organization as they’re building or entering new ventures is to be true to yourself, your core values, and your organizational values.

Our tribe likes to talk about 13 generations to come. We’re not building for the next stock or annual report at the end of the year, we’re building an organization that will enable the tribe to be here for 13 generations. Stick to those values and don’t waver from them. It’s our foundational principles and that’s what’s made us so successful.