Mohegan Sun deal back on track

Aug 15, 2006 9:12 PM

It looks as if the Mohegan casino project at Pocono Downs may see the finish line after all. Penn National Gaming has agreed to pay the Mohegan Tribal Gaming Authority $30 million over the next five years, helping to off-set the tax hike that threatened to kill the deal.

The Mohegans paid Penn National Gaming $280 million for Pocono Downs two years ago, expecting a $2.2 million tax bill from Plains Township. When a Pennsylvania Department of Revenue ruling in July raised the tax to $10 million, the tribe considered pulling out of the deal.

In exchange for Penn National Gaming’s contribution ”” the Gaming Authority is banking on being awarded a slot license from the state — they’ve agreed to eliminate a clause in their purchase agreement that could require Penn National to buy back the track if a license is not awarded, the Norwich Bulletin reported.