The Massachusetts Muddle

Mashpee Wampanoag tribe preparing to release new details about proposed casino design

By Gerry Tuoti

Taunton Gazette Staff Reporter

 

TAUNTON —

Although the Mashpee Wampanoag tribe no longer has exclusivity in the southeastern Massachusetts casino market, it is continuing to pursue a casino in Taunton and is preparing to release new details next week about the proposed facility’s design.

“In light of whatever the Mass. Gaming Commission has done, I don’t think it’s a setback,” Tribal Chairman Cedric Cromwell said when reached by phone Tuesday. “I don’t think it in any way, shape or form affects our progress.”

Cromwell plans to attend next week’s City Council meeting to reveal new architectural details and other information about the proposed tribal casino. A letter from Cromwell was included in Tuesday’s Taunton City Council packet. In the letter, he references “great progress” the tribe has made.

The tribe, which had been given exclusivity in southeastern Massachusetts, or Region C, lost that advantage last month when the Massachusetts Gaming Commission voted unanimously to solicit applications for a commercial casino in the region. Members of the gaming commission expressed concerns over the uncertainty surrounding the Mashpee’s pursuit of the federal land designation they need to open a tribal casino.

“The legislation, as I take it, manifested an intent … a general suggestion, it seems to me, that Region C not be left behind,” Gaming Commission member James McHugh said before voting last month to allow commercial applicants in the region.

The tribe is also awaiting legislative action on the gambling compact it reached in March with Gov. Deval Patrick. Lawmakers have not yet voted on the agreement.

Cromwell said he is undeterred by the Gaming Commission vote and expects the legislature to approve the compact.

“There are exciting things we want to talk with the Taunton City Council about,” Cromwell said. “There are designs and architectural developments we’ve advanced on, and it’s and very important that we review those plans with City Council members and get their input on things. It’s important we go over the architectural design and needs of the destination resort casino to make sure it meets needs of the IGA, the city of Taunton and the Mashpee Wampanoag tribe.”

Read more: http://www.tauntongazette.com/news/x2062763829/Mashpee-Wampanoag-tribe-preparing-to-release-new-details-about-proposed-casino-design#ixzz2Sh7iTsSr

 

United States: The Massachusetts Muddle: What Does It Mean For The Mashpee Wampanoag?

07 May 2013

Article by Dennis J. Whittlesey

 

The Mashpee Wampanoag casino project planned for the town of Taunton in southeastern Massachusetts received a major setback when the state Gaming Commission voted last week to suspend the legislated tribal priority for a license in that portion of the state. The priority was part of a statewide casino plan enacted by the state legislature two years ago authorizing three casinos in the state with a preference giving an Indian tribe the rights to the license designated for the southeastern part of the state. That preference clearly was intended to benefit the Mashpee Wampanoag, which was federally recognized in the spring of 2007 through a Department of the Interior administrative process. Non-tribal casinos were authorized for two other areas of the state, and those licenses are the subject of competition among casino development teams.

The Gaming Commission action was a predictable consequence of the legislative priority itself, in that the law established timelines for the Tribe that many believed would be virtually impossible to meet. Indeed, the Tribe's deadline to get the gaming into trust status in a timely manner has been extended to give Interior additional time in which to accept the proposed casino site into trust status for gaming.

The Mashpee propose to operate a $500 million destination resort casino in Taunton, although it must be noted that the Taunton site is the third identified during six years of the tribal efforts to develop a casino. The other sites were within the Town of Middleborough and New Bedford. In addition to changing proposed gaming sites, the Tribe also replaced its original development team after it had executed a comprehensive local services agreement with Middleborough in July 2007. The peripatetic search for a gaming site has consumed money and a considerable amount of time, causing delay that was cited by the Commission in its unanimous vote to allow commercial casino developers to apply for the license. Such applications will constitute competition for a license that Mashpee has viewed as its legislated entitlement.

At last week's hearing, Gaming Commission Chairman Stephen Crosby declared that the law provided for opening up the competition to non-Indian entities if it appears that Mashpee will be unlikely to obtain the federal trust status necessary for tribal gaming. While Interior officials have declared that they are "expediting" consideration of the trust application and expect a final decision sometime during 2013, the continuing delays led to the Commission's invocation of the law's requirement that it "must" seek commercial bids for the license if it decides that the Tribe will not get land into trust for an Indian casino.

Mashpee Chairman Cedric Cromwell urged the Commission to not approve commercial casino applications, noting that the Tribe is proposing to pay "hundreds of millions of dollars" to the state in return for the exclusive right to conduct casino gaming in the designated region. He asserted that the Tribe will continue to develop and operate its project even if the third license goes elsewhere, meaning that the Tribe will develop a fourth casino in the state pursuant to the federal Indian Gaming Regulatory Act. Part of that assertion included the statement that a federal Indian casino would make no payments into the state's treasury. Commission Chairman Crosby responded that if the Tribe does not obtain status for the land and the third license is not issued, then the state would lose the $85 million license fee and annual tax revenue of approximately $100 million.

The controversy is far from over, and the outcome is far from certain.

Meanwhile, the Massachusetts House of Representatives took action last week that could result in the legalization of online poker in the state, an activity that potentially could have adverse impacts on the "brick and mortar" casino gaming revenues anticipated from the "three casino" plan already on the books. This bill was attached to the FY 2014 budget and would authorize online poker to be offered by up to three separate operators. A much broader bill was introduced in the state Senate in February that proposes to go beyond online poker by authorizing online casino games.

The Massachusetts Muddle seems to have a life of its own. Whether and how the Mashpee Wampanoag casino project will be affected by these latest developments is unknown, but events are moving quickly on Beacon Hill. It is safe to say that the overall picture is constantly changing and is likely to continue doing so.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

http://www.mondaq.com/unitedstates/x/237646/Gaming/The+Massachusetts+Muddle+What+Does+It+Mean+For+The

 

Romney and Tribal Casinos

Mitt and the Indians: How would a Romney presidency affect the Wampanoag's casino dreams?

Republican presidential candidate and former Massachusetts

Gov. Mitt Romney campaigns in Las Vegas, Friday.

AP Photo/Charles Dharapak

 

By George Brennan

gbrennan@capecodonline.com

September 22, 2012

 

When he was the newly elected governor of Massachusetts in 2003, Mitt Romney had an idea to recoup money going out of state to Indian casinos in Connecticut.

 

He offered a deal to Foxwoods and Mohegan Sun: Pay the state of Massachusetts $80 million, and he would make no attempts to legalize casinos and slot parlors in the Bay State; don’t pay the money and he would work to legalize video lottery terminals at the state’s race tracks, essentially turning places such as Raynham Park into racinos.

 

It was pretty much an extortion ploy: ‘You make payments, and we’ll legally agree not to have casinos in Massachusetts. We’ll guarantee you a monopoly,’” said Clyde Barrow, a casino expert and director of the Center for Policy Analysis at the University of Massachusetts Dartmouth.

Foxwoods and Mohegan Sun, which were flying high at the top of their casino games at the time, called Romney’s bluff and refused to pay. Romney never followed through on his threat to allow slots at the tracks.

 

Whether Romney’s plan would have withstood legal challenges is open to speculation. Federal law allows federally recognized Indian tribes to offer the same types of state-legalized gambling on reservation land.

 

Now that Massachusetts has legalized casinos and the Mashpee Wampanoag are on the federal government’s doorstep with a plan to open a tribal casino: What would a Romney presidency mean to that plan for a $500 million Indian casino in Taunton? Would Romney, the former governor, help push the project along or would he follow the lead of the Bush administration that, at times, showed open hostility toward the proliferation of tribal casinos, especially those in areas far away from the tribe’s reservation, according to experts.

 

The Romney campaign did not return repeated emails and phone calls seeking comment.

“I don’t know much about how Romney would be,” Cedric Cromwell, chairman of the Mashpee Wampanoag Tribal Council, said Thursday. “He hasn’t come out with anything specific in his platform about what he would do for tribes.”

 

On the other hand, Cromwell praised the Obama administration, saying the president’s leadership has been “amazing and powerful.” The tribe has received grants for its health program and government center, and the president has personally pushed for a fix to the Supreme Court’s 2009 “Carcieri decision,” which left lingering questions about the authority of the Interior Department to take land into trust for tribes recognized after 1934.

 

The only hint that tribe issues are on Romney’s radar screen is a report on the Indian Country Today website about a fundraiser he held in August in Boston with tribal leaders. The report doesn’t indicate who was at the event, but quotes a Romney-Ryan adviser on Indian issues.

 

“I thought the meeting was very positive,” John Tahsuda, a tribal lobbyist with Navigators Global, told the publication. “Governor Romney spent quality time with the tribal leaders, engaging in a real give-and-take discussion. He expressed his understanding and support of tribes’ inherent sovereignty.

 

He also expressed his support for and desire to strengthen the federal policy of self-governance.”

Tahsuda did not return repeated calls to his Washington, D.C., firm seeking further comment.

Philip Baker-Shenk, a partner with Holland & Knight, a law firm that works with tribes and states on Indian issues, was at the fundraiser, too.

 

“I have every confidence that the Romney/Ryan administration would follow in the footsteps of the Nixon administration, the Reagan administration and the Bush administrations and continue government-to-government relationships with tribes in Massachusetts,” he said in a brief interview.

Holland & Knight is one of the firms hired by Massachusetts to help negotiate a compact with the Mashpee Wampanoag and is now lobbying on behalf of the state for federal approval of the tribe’s land-in-trust application as part of that deal.

 

Cromwell said he wasn’t invited to the Romney fundraiser in Boston and wasn’t even aware that it happened.

 

Exactly what a Romney administration might mean for Indian country, in general, and the Mashpee Wampanoag, in particular, will come down to whom he would put in charge as secretary of the U.S. Department of the Interior and the Bureau of Indian Affairs, Matthew Fletcher, director of the Indigenous Law & Policy Center at Michigan State University, said.

 

Bush didn’t have an assistant secretary in charge at the bureau for six years and the Interior Department was “openly harsh” toward tribes, Fletcher said.

 

Most Indian experts agree that the Obama administration has been more respectful of tribes’ sovereign rights and open to tribe issues, with Fletcher calling the president “exceptional” on Interior-related issues. That’s why some tribes, as they did when President Clinton was leaving office, are attempting to get the Interior Department to act on outstanding issues before the upcoming presidential election. There could even be a flurry of activity should Obama become a lame duck, Fletcher said.

 

Even that’s no guarantee. Two tribes that were granted federal recognition in the final days of the Clinton administration saw those decisions reversed under Bush, Fletcher said.

 

Dennis Whittlesey, a Washington, D.C., attorney who represents tribes across the country, said some are trying to push projects along under the more tribe-friendly Obama administration and to avoid the uncertainty a Romney presidency would bring.

 

“He’s not made any public statements about Indian matters,” Whittlesey said of Romney.

 

“Historically, Republicans have not been as friendly toward Indian affairs as Democrats. If past is prologue, it will not be as friendly an environment for tribes under a Romney administration as it has been under Obama.”

 

Gov. Deval Patrick is openly lobbying for the Mashpee Wampanoag’s casino plans in the deal he struck with the tribe for payments of 21.5 percent of gross gambling revenue from the Taunton project.

 

The Mashpee Wampanoag tribe has filed its application for land in trust, and the state and tribe have submitted the compact for approval by the Bureau of Indian Affairs. That decision could come around the same time as Election Day. The tribe’s application to have 170 acres in Mashpee and 146 acres in Taunton taken into trust is more complicated and could take months, if not years.

 

“I would say, if they don’t have a decision done by the end of this year and we have a new administration, things will be put on hold for a while,” Whittlesey said.

 

Steven Light, co-director of the Institute for the Study of Tribal Gaming Law and Policy at the University of North Dakota, said Romney respects states’ rights as a “tenant of conservatism” and that could translate into respect for the deal reached between Patrick and the tribe.

 

“Romney’s experience as a Massachusetts governor and his interest in state sovereignty would weigh in favor of determinations made by the Patrick administration and all the folks in Massachusetts,” he said.

 

In 2010, John McCain, the Republican nominee, was considered someone who would be supportive of sovereign rights and self-determination for Indian tribes, Light said. But McCain was also critical of off-reservation tribal casinos, he said.

 

The Obama administration has proven to be supportive of tribal self-governance, but movement has been slow – “more incremental than transformative” – in easing some of the regulations imposed by the Bush administration, Light said.

 

All of the experts caution that it’s pure speculation what a President Romney would mean to Indian Country and the Mashpee Wampanoag.

 

“It’s hard to really know, but the fact is that Democrats like Obama have been more favorably inclined to Indian tribes on land in trust,” Barrow said.

 

That would seem to make the Mashpee Wampanoag better off rooting for four more years of Obama than the unknown of Romney.

 

“No doubt about it,” Barrow said.

 

http://www.capecodonline.com/apps/pbcs.dll/article?AID=/20120922/NEWS11/120929935/-1/NEWS

Patchak: What does it mean for Indian casinos?

[Click on the link to view the pdf]

From: Stop Predatory Gambling:

Shared by a supporter: "Note in this discussion the distinction between a tribe that is “under federal jurisdiction” and “federally recognized” – I hadn’t appreciated that distinction before. Also note the reference to the Mashpee Wampanoag seeking an administrative determination – presumably a determination that the tribe was “under federal jurisdiction” prior to 1934. I don’t see how that can be demonstrated."Best,

Les Bernal
Executive Director, Stop Predatory Gambling
100 Maryland Avenue NE, Room 310 | Washington, DC 20002
o: (202) 567-6996 | stoppredatorygambling.org






http://www.jdsupra.com/post/documentViewer.aspx?fid=ee31a2ca-eede-4341-9308-5790e9014348

Gaming Legal News - June 29 2012 • Volume 5, Number 16: The Gun Lake Decision: What Does It Mean For Indian Gaming?

by Dickinson Wright on 7/2/2012

0
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By this time, everyone with an interest in gaming, is aware of last week’s U.S. Supreme Court decision rendered in the case of Match-EBe-Nash-She-Wish Band of Pottawatomi Indians v. Patchak. The Tribe is commonly known as the “Gun Lake Band” and will be so known for the purposes of this article.

Certainly every recipient of the Dickinson Wright Gaming Legal News is fully versed in the decision by virtue of our Gaming Law Group’s collaborative effort to quickly and comprehensively report the decision only a few days after it was rendered. See “Supreme Court Allows Challenge to Gun Lake Tribal Casino to Proceed Forward,” Gaming Legal News, Vol. 5, No. 14 (June 14, 2012). In addition, the decision has been widely reported in both print and internet outlets, so the basic elements are well-known and need not be repeated here.


That said, many readers still do not understand what the Court’s ruling means to Indian gaming and this article will attempt to identify – and respond to – the questions that may remain.

Broken Arrow: Tribal Casino Nixed

Citizens Against Neighborhood Gaming in Broken Arrow

Commission rules that land for Oklahoma tribe's proposed casino not eligible for gambling

THE ASSOCIATED PRESS First Posted: May 26, 2012

TULSA, Okla. — The National Indian Gaming Commission has ruled that the site for a proposed Native American casino in Broken Arrow isn't eligible for gambling.

In a letter to the Kialegee Tribal Town dated Friday, commission chairwoman Tracie Stevens wrote that while the property is on American Indian land, the Muscogee Creek Nation, not the Kialegee Tribal Town, has legal jurisdiction over it.

The Office of the Solicitor for the U.S. Department of the Interior agreed with the opinion, the Tulsa World (http://bit.ly/Kb7zNv) reported in Saturday's editions.

On May 18, U.S. District Judge Gregory Frizzell granted a temporary injunction against the Kialegee Tribal Town and its casino developers on grounds that the Wetumka-based tribe doesn't have jurisdiction over the 20-acre parcel of land.

Town King Tiger Hobia and attorneys have said the tribe doesn't need permission from the commission or others to build a casino on the property, which was being leased to the developer by Creek Nation members and property owners Wynema Capps and Marcella Giles.

Besides the jurisdiction issue, Stevens also wrote that the commission had told the tribe repeatedly they were still reviewing whether the site was eligible for gaming.

Stevens wrote that if gaming occurs on the site, "I will exercise my enforcement authority to issue a notice of violation and temporary closure order."

Attorney Dennis Whittlesey, who represents the tribe, didn't return an email seeking comment on Saturday.

Lawyers have said the tribe plans to appeal Frizzell's decision to the 10th U.S. Circuit Court of Appeals.
Some residents of the Tulsa suburb have opposed the casino because of its proximity to schools and a daycare. Broken Arrow Citizens Against Neighborhood Gaming gathered more than 10,000 signatures on a petition that was presented to federal agencies.

"If we hadn't spoke up, nobody would have said a word," the group's spokesman, Jared Cawley, said. "I would like to think that the NIGC would have done their job, but it didn't look like it to me. I think it shows and gives hope to communities that you don't have to just sit back and let things happen around you."

http://www.therepublic.com/view/story/d5828b1793ad4f328d4cfc93c05bf4ad/OK--Indian-Casino-Flap/

EASY TRIBAL CASINO FINANCING: RIP?

GAMINGLEGALNEWS EDITORIAL BOARD
Dennis J. Whittlesey, Gaming Law/Indian Law



EASY TRIBAL CASINO FINANCING: RIP?
by Dennis J. Whittlesey

The federal Indian Gaming Regulatory Act became law in October 1988, and
a movie entitled “Field of Dreams” was released six months later. The
former established the foundation for what has become a monster gaming
industry. The latter was a fantasy about a man living in Iowa who built a
baseball field in the middle of his farm.

_____

While these two events ostensibly had nothing to do with each other, they
ultimately became synonymous in the minds of many, for Indian gaming soon
adopted as an unofficial motto the signature idea from the movie: “Build
it and they will come.”

So tribes built casinos wherever they could, and the people came. Some of
the tribes built mega-casinos with attendant major hotels and shopping
malls, and the people came. The surge was onward and upward without
regard to when and where it might stop. Indeed, two of the largest
casinos in the world – Foxwoods and Mohegan Sun – were constructed in
Southern Connecticut, and both prospered.

And the financial community quickly caught on that business with tribes
was prosperous, profitable and ostensibly safe. Money was available for
tribal casino projects, even though conventional securitization was not,
since tribal lands and buildings are in trust status and cannot be
mortgaged. Security interests had to be protected through carefully
constructed loan documents but ultimately depended on debt service coming
primarily from casino revenues. However, this was not seen as risky since
it was widely assumed as a matter of “conventional wisdom” – as well as
the history of the gaming industry’s financial performance – that casinos
were immune from financial downturns. The terms Indian gaming and
expansion became synonymous. New and larger tribal casinos were developed
and other still larger casinos planned; meanwhile, many existing tribal
casinos were significantly expanded to offer much broader gaming
opportunities, as well as hotels, vast dining and entertainment venues,
and casino-connected shopping malls previously seen only in Las Vegas.
“Build it and they will come” went from motto to mantra for the entire
Indian gaming industry and its business partners in the financial
community. Conventional wisdom served everyone quite well, at least as
long as financial times were good.

Conventional wisdom is no longer “conventional” or “wisdom.” Over the
past 18 months, the gaming industry throughout the country – both Indian
and non-Indian – has seen a downturn due to the ongoing national and
global financial crisis. The “rosy scenario” for gaming expansion has
faded.

The two largest tribal casinos in the world – Foxwoods (owned by the
Mashantucket Pequot Tribe) and Mohegan Sun (owned by the Mohegan Tribe) –
have served as examples for others to follow. Located only seven miles
apart, each is a billion dollar operation which has aggressively expanded
in anticipation of increasing its market and building brand loyalty which
would deflect any impact from the expansion of gaming into New England.
Each now faces fiscal problems.

Other tribal casinos are also in financial distress due to both over
expansion and tribal memberships demanding periodic stipend payments from
casino revenues. For example, Foxwoods owed its creditors more than $2
billion and was unable to service its debt, yet was paying up to $120,000
annually to each tribal member. When the creditors raised objections to
the stipend payments, former Tribal Chairman Michael Thomas announced
that he would continue the members’ payments even though doing so meant
that debt service could not be satisfied. Thomas was removed as Chairman
by the Tribal Council, and the individual stipends were suspended when
the tribe was unable to make its debt payments. The tribe and its
creditors reportedly have been engaged in serious negotiations to
restructure the debt, negotiations necessitated by the fact the Indian
tribes are not subject to federal bankruptcy laws.

The Foxwoods financial situation was highlighted in a recent article in
The Wall Street Journal reporting on, and analyzing, the current fiscal
woes within Indian Country. Coincidentally, the article appeared just
after the Native American Finance Officers Association sponsored the
“Wall Street Summit II & Tribal Bond Investors Summit” in Jersey City,
New Jersey, on September 14-16. (Significantly, one of the major panels
at NAFOA concerned “At Debt’s Door: Surviving a Distressed Credit
Scenario.”) While the WSJ article portrayed an overly dismal picture of
the situation at Foxwoods, the fact remains that there are problems at a
number of tribal casinos. Mohegan Sun is one.

Mohegan – like Foxwoods – has experienced declining gaming revenues over
the past several years while at the same time incurring new debt. Both
have pursued gaming in Pennsylvania at great expense (Mohegan was
successful in winning a license and commencing operations), pursued
non-Indian gaming in other states at great expense, worked with other
tribes across the country to help them develop gaming at great expense,
and expanded their signature properties at great expense. (The WSJ
article reported that Foxwoods has just completed a three-year expansion
project at a cost of $700 million, an expansion which has not generated
revenues sufficient to service the additional debt.) Adding to the
picture was the news a week ago that Mohegan Sun was laying off between
350-400 employees due to reduced earnings, the first layoffs in that
casino’s history.

NAFOA’s widely respected President Bill Lomax has written that the WSJ
article demonstrated a fundamental lack of understanding of tribal
governments and their business management abilities, expressing concern
that these misunderstandings could negatively impact tribal attempts to
conduct business with tribes. Lomax’s point is well-taken, but the
financial community concerns go much deeper than the debt service at the
two casino giants in Connecticut. And that brings us to the Lac du
Flambeau Tribe of Wisconsin and the astonishing turn of events associated
with its Lake of the Torches Resort/Casino.

When Lac du Flambeau was unable to meet its debt service on a $50 million
bond indenture in late 2009, the bondholder requested its trustee to
invoke certain provisions of the indenture documents including judicial
relief for the appointment of a receiver to operate the casino. The bond
indenture was placed in 2008, and some $46.6 million was outstanding at
the time of default and protective relief seemed certain. However, in
January 2010, a federal judge in Wisconsin denied the requested relief
with a finding that the entire financial transaction was void under the
federal Indian Gaming Regulatory Act because the receivership provision
constituted a management contract as a matter of law. It is
well-established that management contracts and all collateral documents
are void unless approved by the Chairman of the National Indian Gaming
Commission. The Lake of the Torches agreements had not received NIGC
approval, so all of the transaction documents were void. The Lac du
Flambeau tribal leaders originally pledged to honor the financial
obligations, but have since advised the federal court that the tribe no
longer intends to do so. Unless the January decision is reversed on
appeal, the bondholders have no means to recover the outstanding debt.
The problem is not in Indian gaming per se, a point made by NAFOA’s
Lomax. As with any other segment of business, the problem is in the
conduct of business in individual cases, and Indian gaming has a very
good track record overall in responsible planning and management. But,
bad situations receive wide attention because tribal financing uniquely
requires creative ways of protecting the investment community since there
can be no foreclosure and asset seizure. While it always is unfair to
paint a picture of an entire industry based on actions of a few, the fact
is that there is still a great deal of uncertainty among those wishing to
contract with tribes. The end result must be – and, indeed, already is –
increased scrutiny of transactions, transaction documents, and the tribes
with which one is dealing.

However, even increased knowledge and vigilance may not be enough to
insure that responsible tribal projects can be funded. The investment
community will look at the outstanding debt in Indian Country, as well
as the overall downturn in casino revenues. New England tribes are on the
front line of this.

This subject was directly addressed a week ago by Rochanne Hackett,
Senior Vice President and Director of Gaming Development for Wells Fargo
Bank, at the New England Gaming Summit held at Mohegan Sun. Hackett
reported that the lending pool for Indian casinos shrunk some 70 percent
this year, and directly affecting this development was the debt and
business downturn from Foxwoods and Mohegan Sun. She stated that
commercial banks are willing to lend $300 million for new tribal casino
projects, a sharp reduction from the $1 billion which was available only
a couple of years ago.

There still is money available, but securing it likely will be more
complicated from this point forward. Citing the Mohegan Tribe’s interest
in developing a non-tribal casino in Western Massachusetts if the state
enacts enabling legislation, Hackett noted that the state licensure
probably will require licensees to invest at least $600 million in
addition to the costs of land acquisition, which would require creative
financing, including multiple lenders and subordinated debt loans.
However, she was describing financing for a non-tribal project which
would not enjoy the sovereign immunity of tribal casinos, and it is not
clear that a tribal project can ever be financed at the $600 million
level.

In light of the potential default at Foxwoods, the invalidation of loan
obligations at Lac du Flambeau, the huge debt of Mohegan, and other
troubled tribal projects in such places as Arizona, California, and
Washington, there are concerns about funding future tribal projects or
even continuing fiscal stability of existing tribal casinos. All of these
developments dramatically expose the fragile foundation of the “build it
and they will come” philosophy. It is true that tribal gaming had a very
good run for the past decade, but there was overexpansion, too much debt,
and a shrinking clientele due to increased competition and the economic
downturn. The adjudicated invalidity of the financing documents at Lac du
Flambeau only adds to the concern, since at least one well-known casino
financing expert has suggested that dozens of tribal casinos utilized
financing documents identical to those at Lake of the Torches.

Nobody is predicting the collapse of any tribal casino yet, although
Foxwoods continues to be carefully watched. There is something of a “too
big to fail” philosophy at play in the American financial markets.

Whether it proves true is still unknown.

The sky is not yet falling on tribal gaming in general, but it definitely
has fallen on rapid growth and debt accumulation. The notion of “build it
and they will come” will retreat to motion pictures where it belongs.

As for easy tribal financing, it soon may be time to proclaim: requiescat
in pace.