Foxwoods Resort Casino

NYTs: Wither Foxwoods?

Matthew L.M. Fletcher

Here is the article (h/t Pechanga).

An excerpt:

In the early 1970s, just one resident remained on a Pequot reservation in Ledyard, now the site of Foxwoods — an elderly woman named Elizabeth George. Her grandson was Richard Hayward (known as Skip), a pipe welder and a former short-order cook with an audacious vision, innate political skills and a flair for dealmaking. Through his efforts, the tribe won federal recognition in 1983. In 1986, it opened a high-stakes bingo hall. Full-blown casino gambling came to Foxwoods in 1992 and in the two decades since has produced not millions but billions of dollars of revenue. Not surprisingly, the casino and its largess rejuvenated the tribe, whose population is now about 900. (Members trace their bloodlines to 11 Pequot families counted in a 1900 census.)

These days the tribe is dealing with the latest improbability in its turbulent history: financial havoc. The casino is underwater, like a five-bedroom Spanish colonial in a Nevada subdivision. The Pequots misjudged the market, borrowed too much and expanded unwisely. Foxwoods’s debt is on a scale befitting the size of the property — $2.3 billion.

 

Mashantucket Pequot Slot Tax Decision Expected Soon

Matthew L.M. Fletcher

Here are two news articles on the question. The first (here) details the Town of Ledyard’s crusade to collect taxes on the non-Indian owners of the slot machines used at Foxwoods. An excerpt:

Other grievances, not surprisingly, involve money – particularly the sovereign nation’s deal to pay the state a quarter of its slot machine revenues instead of local taxes on reservation property in the northeastern corner of Ledyard.

Though the town grudgingly concedes it can’t collect these revenues, it has for years been trying to levy taxes on personal property owned by non-Indians on reservation lands – specifically slot machines that a New Jersey company leases to the tribe.

Six years ago the tribe and Atlantic City Coin & Slot Service sued Ledyard to block these taxes, claiming such municipal action disregards well-established principles of federal Indian law and interferes with the tribe’s gaming operations, self-determination and sovereign immunity.

So far, the town has spent $900,000 fighting the litigation – a whopping sum that could have been used to hire teachers, repave miles of roads or buy thousands of new library books.

The second (here) includes a quote on the Indian law implications of the case:

Bethany Berger, a professor of Indian law at the University of Connecticut School of Law, said that taxation of non-Indians and their property on tribal lands is complicated. Berger, co-author and member of the editorial board of Felix S. Cohen’s Handbook of Federal Indian Law, the pre-eminent treatise in the field, does not think Ledyard’s case is a strong one.

“The machines are leased by the tribe as part of this federally regulated business that the tribe has a big interest in,” she said, adding that the interests of the state of Connecticut in the matter may not be as strong as Ledyard officials hope.

“With respect to state interest, it can’t just be revenue-raising interest,” Berger said. “Ledyard wants to make money by taxing the machines, and that’s not the kind of interest that’s really important. The federal interest is very strong because of the Indian Gaming Regulatory Act and the tribal interest is also strong because this is the business that provides most of the tribe’s revenue.”

Will the Poor Economy Assist Tribes in Fighting National Labor Relations Board Jurisdiction?

Matthew L.M. Fletcher

Perhaps, given this information, via Indianz:

Foxwoods and the tribe, in their brief, claim that because only a “fraction” of the revenue from Foxwoods is available to the tribe after lenders are paid, a strike at Foxwoods would severely impact the tribe’s ability “to operate a tribal government and function as a sovereign entity.”

The record, however, does not support the claim, Kreisberg writes:

“In this regard, it is undisputed that the Employer (Foxwoods) has annual gross revenues in excess of $1 billion. … Therefore, even if the employer were to face a protracted strike, there is insufficient evidence to establish that it would lack sufficient revenues and/or capital to provide the Tribe’s 900 members, as well as employees and other visitors to the reservation, with any ‘essential’ public services.”

Didn’t Foxwoods just note concern about being able to pay its creditors? What’s in this record?

NPR on Mashantucket Pequot Labor Deal

Matthew L.M. Fletcher

From NPR:

American Indian casinos are big business in the United States, with an estimated 280,000 people employed across more than 400 sites.

That huge workforce is largely unorganized. Only a few such casinos recognize union contracts. Among them is North America’s largest gaming center, Foxwoods Resort Casino in Connecticut.

Its dealers recently struck a deal after a lengthy dispute with the Mashantucket Pequot Tribe. What makes this agreement different is that it was brokered under tribal law.

Unionizing Casinos

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Foxwoods Debt News

Matthew L.M. Fletcher

From the Hartford Courant:

The deeply indebted owners of Foxwoods Resort Casino said Monday that they have reached a deal with creditors that appears to offer some temporary relief.

The Mashantucket Pequot Tribal Council issued a statement saying that it “has entered into a forbearance agreement with its senior lenders” that extends through Jan. 20.

The Tribe did not say how much debt the forbearance applies to or offer any other terms, and said it would not comment further until discussions with creditors are finished.

The tribe, which does not publicly disclose its finances, has reportedly been trying to renegotiate more than $2.3 billion of debt, a situation that has led credit rating agencies to downgrade the tribe’s creditworthiness.

In its statement, the tribe said it “remains committed to working with its lenders to reach consensual resolutions.”

Last month the Pequots placed Michael Thomas, Chair of the Tribal Council, on administrative leave “pending the outcome of an internal review.” Citing a memo from the six other council members to Thomas, The New London Day has reported the council ousted Thomas because he issued a letter Aug. 19 to the tribal membership in which he described his own plan and stated his own opinions about the financial crisis.

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WSJ on Off-Reservation Gaming

Matthew L.M. Fletcher1 Comment

From the WSJ:

The Obama administration may make it easier for Indian tribes to build casinos on land far from their reservations, a move likely to spur a wave of new casino development.

The Interior Department, which runs the Bureau of Indian Affairs, is reconsidering a Bush administration directive requiring that off-reservation casino sites be within commuting distance of the reservation. Many tribes, struggling with high unemployment and poverty on their reservations, are looking to casinos for jobs and other economic benefits.

Casino Applications

See where tribes have filed applications for off-reservation gaming.

“It’s an important issue. It’s a controversial issue and they’re rethinking it,” George Skibine, a deputy assistant secretary at the bureau, said in an interview last week. He added he expected a decision on whether to change the policy “fairly soon.”

Some governors, including Democrat David Paterson of New York and Republican Arnold Schwarzenegger of California, have come out in favor of certain projects in recent months.

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Bloomberg Report on Foxwoods Debt Default — Now $1.45B

Matthew L.M. Fletcher1 Comment

From Bloomberg Report (miigwetch to K.C.):

Foxwoods Casino Owner Said to Seek Debt Restructuring

By Beth Jinks and Jonathan Keehner

Aug. 26 (Bloomberg) — Mashantucket Western Pequot Tribal Nation, owner of the Foxwoods Resort Casino, is seeking to restructure at least $1.45 billion in debt as winnings dwindle, according to a person with knowledge of the situation.

A restructuring plan has been submitted to creditors and the Connecticut casino’s owners have hired Miller Buckfire & Co., a New York investment bank, as an adviser, said the person, who declined to be identified because the talks aren’t public.

Foxwoods, one of the largest casinos in the U.S. by gambling space, may become the biggest tribal casino company to default. The operation has lost business to the recession and competition from new casinos and racetracks with slot machine-style video-lottery terminals in nearby states. Slot revenue fell 13 percent in July, the casino said on Aug. 14.

“They can’t do the types of things other debtors can in a restructure,” Megan Neuburger, an analyst at Fitch Ratings in New York, said today in an interview. “Tribal casinos can’t do a debt-for-equity swap. They can’t raise cash by selling off assets on tribal land” to repay creditors.

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