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Mohegan Facing Roadblocks from Pocono Downs

The Connecticut based Mohegan Tribal Gaming Authority is considering walking away from its plans for a casino at Pocono Downs. They are experiencing a delay in acquiring their game license and facing a higher burden from the gaming tax.

Penn National Gaming, who sold the asset to the authority in October 2004, will return $30 million of the sale price to the Mohegan's. In anticipation of $15 million in state funds, the owner is going to break ground on the first phase of its $200 million Mohegan Sun at Pocono Downs casino.

The Penn National will pay MTGA $30 million over five years under a purchase agreement amended by the seller and buyer. Robert Soper, president and CEO of Mohegan Sun said, "We extinguished all post-closing termination rights."

The payments of five installment are payable on the first five anniversaries of the opening date of slot machine operations at Mohegan Sun at Pocono Downs.

By September 1, Soper had expected to be given the gaming license for their casino. "We hope to open that phase by the end of this eyar."

To ease the burden of the municipal tax, Soper and the MTGA plan to apply for up to $15 million in state development funds. He said, "They appreciate the magnitude of this project, its economic benefit and creation of up to 1,000 new jobs. The state has grant funds and other financial incentives available that are already designated for new development."

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