<PAGE>

                                     UNITED STATES
                           SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C.  20549

                                      FORM 10-Q

[ X ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES 
                                              EXCHANGE ACT OF 1934

For the quarterly period ended:          March 31, 1997


[   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
                                              EXCHANGE ACT OF 1934

For the transaction period___________________ to _________________________ .

Commission file number:       033-80655
                              ---------


                          MOHEGAN TRIBAL GAMING AUTHORITY
                          -------------------------------
                 (Exact name of Registrant as specified in its charter)


                    N/A                               06-1436334
                    ---                               ----------
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)

Mohegan Sun Boulevard, Uncasville, CT                            06382
-------------------------------------                            -----
(Address of principal executive offices)                       (Zip Code)


                                    (860)204-7171
                                    -------------

                  (Registrant's telephone number, including area code)

<PAGE>

                                  UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549


                            FORM 10-Q,   continued

Indicate by check mark whether the Registrants (1) have filed all reports 
required to filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
Registrant was required to file such reports), and (2) have been subject to 
such filing requirements for the past 90 days.    Yes   X     No 
                                                      -----      -----

                     Total number of pages in this report:  19 

<PAGE>

                        MOHEGAN TRIBAL GAMING AUTHORITY

                             INDEX TO FORM 10-Q

PART I --  FINANCIAL INFORMATION                                   Page
ITEM 1 --  Financial Statements                                    Number
                                                                   ------

Review Report of Independent Public Accountants                       1

Financial Information                                                 2

Condensed Balance Sheets of Mohegan Tribal Gaming Authority           3
as of March 31, 1997 (unaudited) and September 30, 1996.

Condensed Statement of Income of Mohegan Tribal Gaming                4
Authority for the Three Months Ended March 31, 1997, and for
the Period October 12, 1996 (date of commencement of
operations), through March 31, 1997 (unaudited).

Condensed Statement of Capital of Mohegan Tribal Gaming               5
Authority for the Period October 12, 1996 (date of
commencement of operations) through March 31, 1997 (unaudited).

Condensed Statement of Cash Flow of Mohegan Tribal Gaming             6
Authority for the Period October 12, 1996 (date of
commencement of operations), through March 31, 1997 (unaudited).

Notes to Condensed Financial Statements of Mohegan Tribal           7-10
Gaming Authority.

ITEM 2 --  Management's Discussion and Analysis of Financial       11-17
Condition and Results of Operations.

PART II  --  OTHER INFORMATION

ITEM 1 --  Legal Proceedings                                         18
ITEM 2 --  Changes in Securities                                     18
ITEM 3 --  Defaults upon Senior Securities                           18
ITEM 4 --  Submission of Matters to a Vote of Security               18
           Holders
ITEM 5 --  Other Information                                         18
ITEM 6 --  Exhibits and Reports on Form 8-K                          18

Signatures  -  Mohegan Tribal Gaming Authority                       19


<PAGE>

                             ARTHUR ANDERSEN LLP

                 REVIEW REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Mohegan Tribal Gaming Authority:


We have reviewed the accompanying condensed balance sheet of Mohegan Tribal 
Gaming Authority ("Authority") as of March 31, 1997, and the related 
condensed statements of income and capital for the three months ended March 
31, 1997, and for the period October 12, 1996 (date of commencement of 
operations) through March 31, 1997, and the related condensed statements of 
cash flows for the period October 12, 1996 (date of commencement of 
operations), through March 31, 1997.  These condensed financial statements 
are the responsibility of the Authority's management.

We conducted our review in accordance with standards established by the 
American Institute of Certified Public Accountants.  A review of interim 
financial information consists principally of applying analytical procedures 
to financial data and making inquiries of persons responsible for financial 
and accounting matters.  It is substantially less in scope than an audit 
conducted in accordance with generally accepted auditing standards, the 
objective of which is the expression of an opinion regarding the financial 
statements taken as a whole.  Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that 
should be made to the financial statements referred to above for them to be 
in conformity with generally accepted accounting principles.

We have previously audited, in accordance with generally accepted auditing 
standards, the condensed balance sheet of Mohegan Tribal Gaming Authority as 
of September 30, 1996, and the related cash flow for the year then ended (not 
presented herein), and, in our report dated November 27, 1996, we expressed 
an unqualified opinion on those financial statements.  In our opinion, the 
information set forth in the accompanying condensed balance sheet of Mohegan 
Tribal Gaming Authority as of September 30, 1996, is fairly stated, in all 
material respects, in relation to the balance sheet from which it has been 
derived.

                                                /s/ Arthur Andersen LLP


Hartford, Connecticut
May 2, 1997


<PAGE>


PART I.   FINANCIAL INFORMATION

Item 1.        Financial Statements

The unaudited condensed financial information as of March 31, 1997, and for the
three-month period ended March 31, 1997, included in this report was reviewed by
Arthur Andersen LLP, independent public accountants, in accordance with the
professional standards and procedures established for such reviews by the
American Institute of Certified Public Accountants.




                                     2

<PAGE>
                       Mohegan Tribal Gaming Authority
                           Condensed Balance Sheets
                                (in thousands)



                                              March 31,       September 30,
                                                 1997            1996
                                             -----------      -------------
                                             (unaudited)
               ASSETS
               ------
CURRENT ASSETS:
 Cash and cash equivalents                     $36,409            $7,437
 Restricted cash                                22,788             5,100
 Receivables, net                                2,720               -
 Inventories                                     4,397               819
 Other current assets                            6,713             8,035
                                             -----------      -------------
   Total current assets                         73,027            21,391

NON-CURRENT ASSETS:
 Capitalized property and equipment, net       288,691           264,918
 Other assets, net                              18,935            21,172
                                             -----------      -------------
   Total assets                               $380,653          $307,481
                                             -----------      -------------
                                             -----------      -------------

       LIABILITIES AND CAPITAL
       -----------------------

CURRENT LIABILITIES:
 Current maturities of long-term debt
     and line of credit                        $15,210           $4,999
 Accounts payable and accrued expenses          44,352           44,250
 Accrued interest payable                       23,418           15,232
                                             -----------      -------------
   Total current liabilities                    82,980           64,481

NON-CURRENT LIABILITIES:
 Long -term debt, net of current maturities    291,707          243,000
                                             -----------      -------------
  Total liabilities                            374,687          307,481
                                             -----------      -------------

CAPITAL:
   Total capital                                 5,966              -
                                             -----------      -------------
   Total liabilities and capital              $380,653         $307,481
                                             -----------      -------------
                                             -----------      -------------

          The accompanying accountants' review report and notes to
                     financial statements should be read in
                   conjunction with these financial statements



                                      3

<PAGE>


                       Mohegan Tribal Gaming Authority
                       Condensed Statements of Income
                                  (unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>

                                    For the Three       For the period October 12, 1996
                                     Months Ended      (date of commencement of operations)
                                    March 31, 1997           through March 31, 1997
                                    --------------           ----------------------
<S>                                 <C>                <C>
REVENUES:
 Gaming                                $107,016                       $197,912
 Food and beverage                       11,657                         21,277
 Other                                    3,458                          5,902
                                    --------------           ----------------------
   Gross revenues                       122,131                        225,091

 Less - Promotional allowances           (9,114)                       (15,062)
                                    --------------           ----------------------
   Net revenues                         113,017                        210,029
                                    --------------           ----------------------
COST AND EXPENSES:
 Gaming                                  50,671                         94,315
 Loss from bingo operations                 491                          1,813
 Food and beverage                        6,185                         12,746
 General and administration              21,303                         42,898
 Depreciation and amortization            7,648                         15,312
 Management fee                           4,846                          7,204
 Other                                    2,369                          4,769
                                    --------------           ----------------------
   Total costs and expenses              93,513                        179,057
                                    --------------           ----------------------
   Income from operations                19,504                         30,972
                                    --------------           ----------------------
NONOPERATING INCOME AND
 (EXPENSES):
 Interest income and other income           505                           740
 Interest expense                       (11,650)                      (21,386)
                                    --------------           ----------------------
                                        (11,145)                      (20,646)
                                    --------------           ----------------------
       Net income                        $8,359                       $10,326
                                    --------------           ----------------------
                                    --------------           ----------------------
</TABLE>







          The accompanying accountants' review report and notes to
                 financial statements should be read in
                conjunction with these financial statements



                                      4

<PAGE>

                       Mohegan Tribal Gaming Authority
                       Condensed Statement of Capital
                                  (unaudited)
                                 (in thousands)





                             For the period October 12, 1996
                           (date of commencement of operations)
Capital                          through March 31, 1997
-------                          ----------------------

Balance  October 12, 1996                $   -

Net income                                 10,326

Distribution to Tribe                      (4,360)
                                 ----------------------

Balance March 31, 1997                   $  5,966
                                 ----------------------
                                 ----------------------









          The accompanying accountants' review report and notes to
                   financial statements should be read in
                 conjunction with these financial statements




                                      5
<PAGE>

                         Mohegan Tribal Gaming Authority
                        Condensed Statement of Cash Flow
                                   (unaudited)
                                  (in thousands)


<TABLE>
<CAPTION>

                                                              For the period October 12, 1996
                                                           (date of commencement of operations)
                                                                 through March 31, 1997
                                                                 ----------------------

<S>                                                              <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income                                                                $10,326
Adjustments to reconcile net income to
    net cash flow provided by operating activities-
      Depreciation and amortization                                        15,312
      Provisions for losses on receivables                                     99
      Changes in operating assets and liabilities
       Increase in receivables and other current assets                   (12,030)
       Increase in accounts payable and accrued expenses                   44,176
                                                                 ----------------------

    Net cash flow provided by operating activities                         57,883
                                                                 ----------------------

CASH FLOW TO INVESTING ACTIVITIES:
Purchase of property and equipment                                        (29,893)
Decrease in construction payable                                          (35,888)
                                                                 ---------------------- 
    Net cash flow used in investing activities                            (65,781)
                                                                 ----------------------

CASH FLOW FROM FINANCING ACTIVITIES:
Distribution to Tribe                                                      (4,360)
Increase in short-term borrowings                                           7,056
Proceeds from equipment financing                                          37,675
Additional borrowing from Secured Completion Guarantee                     23,000
Payments on current maturities of long-term debt                           (8,813)
                                                                 ----------------------

    Net cash flow provided by financing activities                         54,558
                                                                 ----------------------

    Net increase in cash and cash equivalents                              46,660

Cash and Cash Equivalents at October 12, 1996                              12,537
                                                                 ----------------------

Cash and Cash Equivalents at December 31, 1996                            $59,197
                                                                 ----------------------
                                                                 ----------------------

Cash Paid for Interest                                                    $13,753
                                                                 ----------------------
                                                                 ----------------------

</TABLE>

            The accompanying accountants' review report and notes to
                  financial statements should be read in
                conjunction with these financial statements

                                      6


<PAGE>

                       MOHEGAN TRIBAL GAMING AUTHORITY
                   NOTES TO CONDENSED FINANCIAL STATEMENTS
                               MARCH 31, 1997
                                (UNAUDITED)

Basis of Presentation:

The Mohegan Tribal Gaming Authority (the "Authority"), established on July 
15, 1995, is an instrumentality of the Mohegan Tribe of Indians of 
Connecticut (the "Tribe").  The Authority commenced operation of the gaming 
and entertainment facility (the "Mohegan Sun") on October 12, 1996.

Prior to October 12, 1996, the Authority was classified as a Development 
Stage enterprise as defined by Statement of Financial Accounting Standards 
No. 7.

The Authority has engaged Trading Cove Associates ("TCA") to manage the 
development, construction and operation of the Mohegan Sun.  TCA is 50% owned 
by Sun Cove Ltd., an affiliate of Sun International Hotels Limited ("Sun 
International"), and 50% owned by Waterford Gaming, LLC.

The condensed financial statements have been prepared in accordance with the 
accounting policies described in the Authority's 1996 Annual Report on Form 
10-K and should be read in conjunction with the Notes to Condensed Financial 
Statements which appear in that report.  The condensed Balance Sheet at 
September 30, 1996, contained herein was derived from audited financial 
statements, but does not include all disclosures contained in the Form 10-K 
and applicable under generally accepted accounting principles.

In the opinion of the Authority, all adjustments, consisting only of normal 
recurring adjustments, necessary for a fair presentation of the results for 
the interim periods have been included.  The results reflected in the 
condensed financial statements for the second quarter of 1997 are not 
necessarily indicative of expected results for the full year, as the casino 
industry in Connecticut is seasonal in nature.

The Authority's operation of a casino in Connecticut is subject to 
significant regulatory controls which affect virtually all of its operations.

2.  Long-Term Debt:

Long-term debt consists of the following:

                                            March 31,         September 30,
                                              1997                1996
                                            ---------         -------------
                                             (000's)             (000's)

Senior Secured Notes (A)                     $175,000            $175,000
Subordinated Notes (B)                         90,000              67,000
Lines of Credit (working capital) (C)           6,806               4,749
Equipment Financing (D)                        35,111                 -
Other                                            -                  1,250
                                             --------            --------
                                              306,917             247,999
Less - Current Maturities                      15,210               4,999
                                             --------            --------
                                             $291,707            $243,000
                                             --------            --------
                                             --------            --------

                                      7

<PAGE>

                       MOHEGAN TRIBAL GAMING AUTHORITY
                   NOTES TO CONDENSED FINANCIAL STATEMENTS
                                 MARCH 31, 1997
                                   (UNAUDITED)

2.  Long-Term Debt continued:

A.   On September 29, 1995, the Authority issued $175 million in Senior 
Secured Notes due 2002 (the "Senior Notes") with fixed interest payable at a 
rate of 13.50% per annum and Cash Flow Participation Interest, as defined, in 
an aggregate amount of 5.0% of the Authority's Cash Flow up to a limit, 
during any two consecutive semi-annual periods, ending September 30, of $250 
million of the Authority's Cash Flow.  Fixed interest is payable 
semi-annually and commenced May 15, 1996. The aggregate amount of Cash Flow 
Participation Interest payable will be reduced pro rata for reductions in 
outstanding principal amount of Senior Notes.  The payment of Cash Flow 
Participation Interest may be deferred if the Authority's Fixed Charge 
Coverage Ratio is less than 2 to 1.  The Senior Notes are redeemable at set 
prices as set forth in the Senior Notes after November 15, 1999, at the 
option of the Authority.  Upon the occurrence of certain events (as specified 
in the Indenture for the Senior Notes) each holder of Senior Notes can 
require the Authority to repurchase the notes at prices specified in the 
Senior Notes.  Beginning with the fiscal year ending September 30, 1997, the 
Authority will be required, under certain circumstances, to offer to 
purchase, at set prices, certain amounts of Senior Notes then outstanding.

B.   The Authority has obtained $90.0 million of subordinated financing from 
Sun International and Waterford Gaming LLC in the form of notes.  The 
Authority has issued $20.0 million of subordinated notes to each of Sun 
International and Waterford Gaming LLC (Subordinated Notes), which notes bear 
interest at 15.0% per year, payable semi-annually.  Interest on the 
Subordinated Notes is being deferred and will not be paid until at least half 
of the Senior Notes have been retired (or offered to be retired, pursuant to 
the terms of the Indenture governing the Senior Notes) and certain other 
conditions have been fulfilled. The Authority also has issued $50.0 million 
in subordinated notes to Sun International evidencing draws made by the 
Authority under the $50.0 million secured completion guarantee provided by 
Sun International (Secured Completion Guarantee). Each subordinated note 
issued under the Secured Completion Guarantee will bear interest at the rate 
per annum then most recently announced by Chemical Bank of New York as its 
prime rate plus 1%, which shall be set and revised at intervals of six 
months.  All such notes are due 2003; however, principal cannot be paid until 
the Senior Notes have been paid in full, unless certain conditions are met.

C.   The Authority has obtained two lines of credit totaling $13.2 million.  
The line of credit for $12.5 million, obtained from Fleet National Bank, 
provides for interest based on various floating indexes (9.50% as of March 
31, 1997). The second line of credit for $650,000 was obtained from Norwich 
Savings Society and bears interest at a rate of 7.75%.  As of  March 31, 
1997, $6.8 million was outstanding under both lines of credit.


                                      8

<PAGE>

                       MOHEGAN TRIBAL GAMING AUTHORITY
                   NOTES TO CONDENSED FINANCIAL STATEMENTS
                                MARCH 31, 1997
                                  (UNAUDITED)

2.  Long-Term Debt continued:

These amounts were used for working capital purposes.

D.   The Authority has received gaming equipment financing of $23.0 million 
from CIT-Group/Equipment Financing, Inc. ("CIT Group").  The terms of this 
agreement provide that borrowings bear interest of 2% over prime, commencing 
from the date of delivery of the equipment.  Principal payments will be over 
48 months and commenced December 1996.

The Authority has received equipment financing of $9.0 million from the CIT 
Group and Phoenixcor, Inc. ("Phoenixcor").  The CIT Group agreement provides 
for funding of $5.0 million with an interest rate of 9.17%.  Principal 
payments will be over 48 months and commenced December 1996.  The Phoenixcor 
agreement provides for funding of $4.0 million with an interest rate of 
8.95%.  Principal payments will be over 48 months and commenced December 
1996.  

The Authority has received equipment financing of $5.1 million from PDS 
Financial Corporation.  The terms of this agreement provide that borrowings 
bear interest of 12%.  Principal payments will be over 48 months and 
commenced January 1997.

The Authority received working capital financing of $500,000 from New Horizon 
Kids Quest IV, Inc.  The terms consist of an interest rate of 2% over prime. 
Principal payments will be over 36 months, which commenced October 1996.

3. Operating Leases:

The Authority has entered into numerous operating leases, the most 
significant of which are as follows:

The  PDS Financial Corporation has two operating leases for equipment with 
the Authority.  The proceeds of the first agreement are $10.4 million with a 
fixed monthly payment of  $253,000.  The lease payments will be over 48 
months and commenced October 1996.  The proceeds of the second lease 
agreement are $4.1 million with a fixed monthly payment of $95,000.  The 
lease payments will be over 48 months and commenced November 1996.


                                      9

<PAGE>

                       MOHEGAN TRIBAL GAMING AUTHORITY
                   NOTES TO CONDENSED FINANCIAL STATEMENTS
                                MARCH 31, 1997
                                  (UNAUDITED)


3. Operating Leases continued:

The third agreement with Pitney Bowes Credit Corp. provided proceeds of $4.0 
million with a fixed monthly payment of $112,000.  The lease payments will be 
over 42 months and commenced January 1997.

The fourth agreement with New England Capital Corporation provided proceeds 
of $1.5 million with a fixed monthly payment of $42,000.  The lease payments 
will be over 48 months and commenced March 1997.

4.  Commitments:

The Tribe's Compact with the State of Connecticut stipulates that a portion 
of the revenues earned on slot machines must be paid to the State of 
Connecticut ("Slot Win contribution").  For each twelve-month period 
commencing July 1, 1995, the minimum contribution of the Tribe to the State 
of Connecticut shall be the lesser of (a) 30% of gross revenues from slot 
machines, or (b) the greater of (i) 25% of gross revenues from slot machines 
or (ii) $80,000,000.  These payments will not be required if the State of 
Connecticut legalizes any other gaming operations with slot machines to be 
operated in the State of Connecticut (other than on certain Indian lands).  
The Authority has reflected $35,189,000 of gaming expense in its financial 
statements for the required Slot Win Contribution payments to the State of 
Connecticut  for the fiscal period ended March 31, 1997.  Slot Win 
Contribution payments to the State of Connecticut for the quarter ended March 
31, 1997, totaled $23,288,000.

5.  Related Party Transactions:

The Tribe provided Governmental and Administrative services to the Authority 
in conjunction with the operation of Mohegan Sun.  For the period October 12, 
1996 through March 31, 1997, the Authority incurred $2,934,000 of expense for 
such services of which $2,925,000 was paid.  The Authority's second quarter 
services incurred to the Tribe totaled $1,563,000 of which $1,554,000 was 
paid as of March 31, 1997.

In addition, the Tribe, through two of its limited liability companies, has 
entered into various land lease agreements with the Authority.  Amounts paid 
by the Authority under these lease agreements to the limited liability 
companies was $2,456,116 for the fiscal period ended March 31, 1997.  The 
Authority paid, under the lease agreements to the limited liability 
companies, $1,554,116 for the second quarter ended March 31, 1997.


                                     10


<PAGE>

ITEM 2 --  Management's Discussion and Analysis of Financial Condition and
           Results of Operation

RESULTS OF OPERATIONS

CAPITAL RESOURCES, CAPITAL SPENDING AND LIQUIDITY

The Mohegan Sun commenced operations on October 12, 1996.  During the period 
from October 12 through March 31, 1997, cash provided by operations was 
$57,883,000. On November 15, 1996, Mohegan Sun made an interest payment of 
$11,813,000 to the holders of the Senior Notes.  This interest payment 
consisted of $9,304,000, which was funded from the Authority's pre-opening 
construction account (funds available before operations commenced on October 
12, 1996) and $2,509,000 which was funded from the operational cash flow.

The Authority historically has funded its operations through the issuance of 
debt.  On September 29, 1995, the Authority issued $175 million in principal 
amount of Senior Secured Notes due 2002 (the "Senior Notes") with fixed 
interest payable at a rate of 13.5% per annum and participation interest 
equal to 5.0% of the Authority's cash flow up to a limit, during any two 
consecutive semi-annual periods ending on September 30, of $250 million of 
the Authority's cash flow. Fixed interest is payable semi-annually on May 15 
and November 15.  The Senior Notes are redeemable after November 15, 1999, at 
the option of the Authority, at prices set forth in the Senior Notes.  Upon 
the occurrence of certain events (as specified in the Indenture for the 
Senior Notes), each holder of Senior Notes can require the Authority to 
repurchase the Notes at prices specified in the Senior Notes.  Beginning with 
the current fiscal year, the Authority will be required, under certain 
circumstances, to offer to purchase, at set prices, certain amounts of Senior 
Notes then outstanding.  The Indenture governing the Senior Notes contains 
certain convenants restricting the Authority's ability to, among other 
things, make certain cash payments, incur liens or additional indebtedness, 
sell assets, lease property, enter into transactions with affiliates or 
effect any merger, consolidation or any transfer or sale of substantially all 
of its assets.  The Authority believes it currently is in compliance with all 
of the convenants and restrictions contained in the Indenture.

On September 29, 1995, the Authority had issued $40.0 million of subordinated 
notes (the "Subordinated Notes") to Sun International.  Subsequent to 
issuance, Sun International resold fifty-percent of the Subordinated Notes, 
with a principal amount equal to $20.0 million, to Waterford Gaming, LLC.  
The Subordinated Notes bear interest at 15% per year, payable semi-annually, 
and are due in 2003; however, principal cannot be paid until the Senior Notes 
have been paid in full, unless certain conditions are met.  Interest on the 
Subordinated Notes is being deferred and will not be paid until at least half 
of the Senior Notes have been retired (or offered to be retired, pursuant to 
the terms of the Indenture governing the Senior Notes) and certain other 
conditions have been fulfilled.

                                      11

<PAGE>

RESULTS OF OPERATIONS

CAPITAL RESOURCES, CAPITAL SPENDING AND LIQUIDITY continued

The Authority's capital spending associated with the development of the 
facility totaled $65,781,000 for the period from October 12, 1996, through 
March 31, 1997.  Including land and capitalized interest, the Mohegan Sun is 
expected to cost approximately $305 million.  As of March 31, 1997, the 
Authority had incurred expenditures of approximately $299.8 million with the 
development of the facility.  The Authority may not obligate itself to pay 
development costs in excess of $325 million without the further consent of 
the National Indian Gaming Commission (the "NIGC").  In the event final 
development costs exceed $325 million, the Authority would require additional 
consent of the NIGC, and there can be no assurances such consent would be 
given.  Based upon its review of the budget and the open cost items, the 
Authority believes that the total cost of developing, constructing, equipping 
and opening the Mohegan Sun will not exceed the sum of the proceeds from the 
sale of the Senior Notes and the Subordinated Notes, amounts available under 
the Secured Completion Guarantee, the Equipment Financing and the Working 
Capital Financing and cash flow from operations. However, there is no 
assurance that such costs will not exceed budgeted amounts.

Of the Authority's total capital spending, capital expenditures for 
post-opening enhancement projects at the facility totaled $3,640,000 for the 
period from October 12, 1996, through March 31, 1997.  Capital spending will 
increase over the remaining two quarters of the fiscal year.  The additional 
expenditures will represent capital projects at the facility, that in the 
Authority's opinion, will further enhance the guest's experience at the 
facility.  The Authority believes that borrowings under its existing 
financing agreements and cash flow from operations will be sufficient to fund 
its currently planned capital expenditures.

The Authority has a $12.5 million line of credit which expires on September 
24, 1997.  Borrowings under this line bear interest at various rates.  As of 
March 31, 1997, approximately $6.2 million was outstanding under this line at 
an interest rate of 9.25%.  The Authority also has a $650,000 line of credit 
which expires on July 31, 1997.  As of March 31, 1997, approximately $650,000 
was outstanding under this line at an interest rate of 7.75%.  The funds were 
used for the initial working capital needs in conjunction with the opening of 
the facility. 

                                      12

<PAGE>

RESULTS OF OPERATIONS

CAPITAL RESOURCES, CAPITAL SPENDING AND LIQUIDITY continued

The Authority entered into $37.7 million of equipment leasing arrangements 
with several finance companies, under varying terms.  As of March 31, 1997, 
the Authority had outstanding borrowings under these arrangements of $21.4 
million, at an interest rate of 2% over prime; $4.6 million, at an interest 
rate of 9.17%; $3.7 million, at an interest rate of 8.95%; $4.9 million at an 
interest rate of 12.0% and $500,000 at an interest rate of 2% over prime and 
$2.6 million of other various leases.  All of such amounts are being repaid 
by the Authority over the 48 months commencing with December 1996.

The Authority, for the quarter ending March 31, 1997, borrowed the final $8 
million, for a total of $50.0 million, which was available under the Secured 
Completion Guarantee to fund construction development costs associated with 
the completion of the facility.

The Authority believes that existing cash balances and operating cash flow 
will provide the Authority with sufficient resources to meet its existing 
debt obligations and capital expenditure requirements.  However, the ability 
of the Authority to meet its debt service requirements will be entirely 
dependent upon the completion and future successful performance of the 
Mohegan Sun, which is subject to financial, economic, political, competitive, 
and other factors, many of which are beyond the Authority's control.

Private Securities Litigation Reform Act

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" 
for forward-looking statements.  Certain information included in this Form 
10-Q filed by the Authority with the Securities and Exchange Commission 
contains statements that are forward-looking, such as statements relating to 
plans for future expansion and other business development activities, ability 
to meet existing debt obligations, as well as other capital spending, 
financing sources and the effects of regulation (including gaming and tax 
regulation) and competition.  Such forward-looking information involves 
important risks and uncertainties that could significantly affect anticipated 
results in the future and, accordingly, such results may differ from those 
expressed in any forward-looking statements made by or on behalf of the 
Authority.  These risks and uncertainties include, but are not limited to, 
those relating to development and construction activities, dependence on 
existing management, leverage and debt service (including sensitivity to 
fluctuations in interest rates), competition for gaming patrons in the 
northeastern United States domestic or global economic conditions, changes in 
federal tax laws or the administration of such laws and changes in gaming 
laws or regulations (including the legalization of gaming in certain 
jurisdictions). 

                                      13

<PAGE>

Operating Results for the Three Months Ending March 31, 1997-

Operating Revenues and Expenses:

Mohegan Sun has 150,000 square feet of gaming space, 2,680 slot machines and 
181 gaming tables, dining, entertainment, and retail shopping.  The facility 
had 5,260 employees as of March 31, 1997. Mohegan Sun is approximately a two 
hour drive from New York City and Boston.

Gaming revenues were $107,016,000 for the three months ending March 31, 1997. 
The second quarter reflects 90 days of gaming activity.

Slot revenues were $73,180,000 for the three months ending March 31, 1997 and 
reflects a win per unit per day of $304 for the second quarter.

Table game revenues were $33,836,000 for the three months ending March 31, 
1997.

Other revenues were $15,115,000 for the three months ending March 31, 1997. 
Other revenues primarily represent revenues from food and beverage and retail 
operations.

Gaming costs and expenses were $50,671,000 for the three months ending  March 
31, 1997, which reflects costs and expenses associated with table games, slot 
operations, slot win contribution expense and promotional allowances given to 
patrons.

Under its Tribal-State Compact, the Authority is required to pay Slot Win 
contributions to the State of Connecticut equal to the lesser of (i) 30% of 
gross operating revenues derived from slot machines during the State's fiscal 
year, or (ii) the greater of 25% of gross operating revenues from such 
devices during the State's fiscal year or $80,000,000.  For the three months 
ending March 31, 1997, $23,288,000 was paid by the Authority in accordance 
with the agreement and recorded as gaming expenses.

Loss from Bingo operations reflects the operating results, excluding 
depreciation,  amortization and interest of $89,000 of the Mohegan Sun's 
Bingo operations.  Bingo is operated by the Mohegan Tribal Gaming Authority 
and is not managed by Trading Cove Associates. 

Depreciation and amortization includes amortization of $4,483,000 of 
pre-opening costs associated with the development of Mohegan Sun.

Management fee reflects Trading Cove Associates management fee associated 
with net revenue of Mohegan Sun before bingo operations, which is operated 
directly by the Mohegan Tribal Gaming Authority and not managed by Trading 
Cove Associates. For the three months ending March 31, 1997, the management 
fee incurred was $4,846,000, of which $2,022,000 was paid as of March 31, 
1997. 

                                      14

<PAGE>

Operating Results for the Three Months Ending March 31, 1997-

Operating Revenues and Expenses continued

Income from operations was $19,504,000 for the three months ending March 31, 
1997.  Earnings before depreciation, interest, and taxes for the second 
quarter were $27,152,000.

Net interest expense was $11,145,000 for the three months ending March 31, 
1997. The interest expense reflects both fixed and participating interest 
from the Senior Secured Notes, Equipment Financing and Subordinated Notes.

                                      15

<PAGE>

Operating Results for the Period October 12, 1996 (commencement of operations)
through March 31, 1997-

Operating Revenues and Expenses continued

Gaming revenues were $197,912,000 for the period October 12, 1996, through 
March 31, 1997.  The fiscal period ending March 31, 1997, reflects 174 days 
of gaming activity.  Table games and slot machines were in operation for 171 
and 174 days respectively for the fiscal period ending March 31, 1997.

Slot revenues were $137,872,000 for the period October 12, 1996, through 
March 31, 1997 and reflects a win per unit per day of $306 for the fiscal 
period ending March 31, 1997.

Table game revenues were $60,040,000 for the period October 12, 1996, through 
March 31, 1997. 

Other revenues were $27,179,000 for the period October 12, 1996, through 
March 31, 1997.  Other revenues primarily represent revenues from food and 
beverage and retail operations.

Gaming costs and expenses were $94,315,000 for the period October 12, 1996, 
through  March 31, 1997, which reflects costs and expenses associated with 
table games, slot operations, slot win contribution expense and promotional 
allowances given to patrons.

Under its Tribal-State Compact, the Authority is required to pay Slot Win 
contributions to the State of Connecticut equal to the lesser of (i) 30% of 
gross operating revenues derived from slot machines during the State's fiscal 
year, or (ii) the greater of 25% of gross operating revenues from such 
devices during the State's fiscal year or $80,000,000.  For the period 
October 12, 1996 through March 31, 1997, $40,000,000 was paid by the 
Authority in accordance with the agreement and recorded as gaming expenses.

Loss from Bingo operations reflects the operating results, excluding 
depreciation,  amortization and interest of $166,000 of the Mohegan Sun's 
Bingo operations.  Bingo is operated by the Mohegan Tribal Gaming Authority 
and not managed by Trading Cove Associates. 

Depreciation and amortization includes amortization of pre-opening costs 
amounting to $9,076,000 associated with the development of Mohegan Sun. 

                                      16

<PAGE>

Operating Results for the Period October 12, 1996 (commencement of operations)
through March  31, 1997-

Operating Revenues and Expenses continued

Management fee reflects Trading Cove Associates management fee associated 
with net revenue of Mohegan Sun before bingo operations, which is operated 
directly by the Mohegan Tribal Gaming Authority and not managed by Trading 
Cove Associates. For the period October 12, 1996, through March 31, 1997, 
management fee payments were $7,204,000.

Income from operations was $30,972,000 for the period October 12, 1996, 
through March 31, 1997.  Earnings before depreciation, interest, and taxes 
for the second quarter were $46,284,000.

Net interest expense was $20,646,000 for the period October 12, 1996, through 
March 31, 1997.  The interest expense reflects both fixed and participating 
interest from the Senior Secured Notes, Equipment Financing and Subordinated 
Notes. 

                                      17

<PAGE>

                         Part II  -  Other Information:

Item I  --  Legal Proceedings:

The Authority is involved in various claims and legal actions arising in the 
ordinary course of business.  In the opinion of management, the ultimate 
disposition of these matters will not have a material adverse effect on the 
Authority's consolidated financial condition or results of operations.

Item 2 --  Changes in Securities:

None

Item 3 --  Defaults Upon Senior Securities:

None

Item 4  --  Submission of Matters to a Vote of Security Holders:

None

Item 5  --  Other Information:

None

Item 6  --  Exhibits and Reports on Form 8-K:

        a.  Exhibits:  27  Financial Data Schedule for Mohegan Tribal Gaming
                           Authority

        b.  Current reports on Form 8-K:  None

                                      18

<PAGE>

                                  SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as 
amended, the Registrant has duly caused this Report to be signed on its 
behalf by the undersigned thereunto duly authorized.

                                MOHEGAN TRIBAL GAMING AUTHORITY



Date:  5-9-97                   By:  /s/ William J. Velardo
     --------------------          ------------------------------------
                                   William J. Velardo,
                                   Executive Vice President



Date:  May 9, 1997              By:  /s/ Jeffrey E. Hartmann
     --------------------          ------------------------------------
                                   Jeffrey E. Hartmann, Chief Financial Officer
                                   and Senior Vice President of Finance
                                   (Principal Financial and Accounting Officer)

                                      19