Federal Judge Throws Out MGM Lawsuit That Opposed Tribes’ Third Casino Plans

Federal Judge Throws Out MGM Lawsuit That Opposed Tribes’ Third Casino Plans

by Steve Majerus-Collins | Jul 1, 2016

CTNEWSJUNKIE FILE PHOTO

Mohegan Tribal Chairman Kevin Brown holds a map of MGM’s market 

for its Springfield casino

In a move that may help Connecticut’s two federally recognized Indian tribes build a new casino somewhere between Hartford and the Massachusetts border, a federal district judge dismissed a legal challenge to the proposal brought by MGM Resorts International.

The gambling company, which is constructing a nearly $1 billion casino just across the state border in Springfield, Mass., sought to block the joint plan in Connecticut by charging that the state conspired with the tribes to keep out potential competitors.

U.S. District Judge Alvin W. Thompson ruled that MGM failed to “adequately allege an injury” from a law enacted last year that allows the state’s two Indian tribes to form a special business entity and negotiate casino development with a town.

Thompson said that because any injury to MGM is “purely speculative” the company doesn’t have legal standing to sue, a decision the casino operator is likely to appeal.

Neither the Mohegan Tribe nor the Mashantucket Tribal Nation, who are working together on the joint venture called MMCT Venture LLC, have issued any comment on the ruling. MGM sued Gov. Dannel P. Malloy and other state officials.

The two tribes have operated the Foxwoods and Mohegan Sun casinos in southeastern Connecticut since the 1990s under a deal made with the state.

Officials agreed to let them pursue a joint satellite casino to compete with new ventures in neighboring states, but there is no solid plan yet. Once a site is chosen, the state will have the final word on whether to go along with the proposed location and will establish rules governing the operation.

MGM’s $950 million complex in Springfield, now under construction, is slated to open in late 2018.

Alan Feldman, MGM’s vice president of global government and industry affairs, told lawmakers in March that the new joint venture by the tribes would be “a brand new commercial industry” entirely different from the gaming operations on tribal land governed by federal regulations. He said then that the law enacted by the state that allowed the joint venture surrendered decision-making to the tribes while shutting out competitors.

In his response to the lawsuit, state Attorney General George Jepsen argued that MGM lacked standing to bring the case because it “has not suffered a concrete, particularized and actual or imminent injury” and that any harm it has suffered would not be resolved by a favorable ruling.

In accepting the state’s position, the judge’s 20-page decision shot down MGM’s claim that the exclusive rights granted to the two tribes gave them a competitive advantage.

The state countered MGM’s suit by denying the tribes had an exclusive, no-bid contract. In fact, it said, the law allowing the tribes to partner doesn’t let them “do anything they (or MGM) could not already do” before the statute was ever enacted. Moreover, it said, nothing in the law bars MGM from taking steps to develop its own casino in Connecticut.

Thompson said in his decision that MGM’s argument was flawed because it could, like the tribes, enter into an agreement with a municipality to construct a casino and then seek state approval — the same thing the two Connecticut tribes must do to proceed with a project.

The judge also said nothing in the law puts MGM at a competitive disadvantage since it can pursue a project as easily as the tribes.

MGM is a Nevada-based gaming and entertainment company that brought in more than $9 billion in worldwide revenues in 2015.

Its Springfield project “envisions an exciting and lively residential, retail, dining and entertainment district that preserves much of downtown’s most iconic architecture while initiating a rebirth of the city’s downtown neighborhood,” according to the company’s most recent annual report.

A report commissioned by the tribes found the two casinos in southeastern Connecticut will lose about 9,300 jobs by 2019 if gambling facilities in New York and Massachusetts cannibalize $703 million in gaming and non-gaming revenues. The reports author, Clyde Barrow, estimated that a new Connecticut casino north of Hartford would keep about $253 million of that money in state.

A partnership created by the tribes, MMCT Venture, last year received proposals to put the new casino in East Hartford, Hartford, East Windsor, or Windsor Locks, including land in or near Bradley International Airport. East Windsor is already out of the running.

Ongoing discussions with the Connecticut Airport Authority indicate that Bradley remains a likely spot despite taking one site there out of contention this week.

A spokesman for the MMCT, Andrew Doba, said in a prepared statement that the tribes “are pleased that the CAA wants to continue this critically important conversation by suggesting other locations on their property.”

“Thousands of jobs are on the line, and their willingness to remain a part of the discussion as we determine the optimal site for the third Connecticut casino is a real asset in our selection process. Our intention is to announce a set of finalists as soon as that process is completed,” Doba said.

http://www.ctnewsjunkie.com/archives/entry/federal_judge_throws_out_mgm_lawsuit_that_opposed_tribes_third_casino_plans/

Federal Judge Sides With State In Casino Expansion Lawsuit

Federal Judge Sides With State In Casino Expansion Lawsuit

Springfield Mayor Domenic J. Sarno speaks to a large crowd gathered for the ceremonial groundbreaking of the Springfield MGM Casino. Along with Sarno were Chairman and CEO of MGM Resorts International Jim Murren, MGM Springfield President Michael Mathis, Massachusetts Gaming Commission Chairman Stephen Crosby, Associate Director at Revitalize CDC Ethel Griffin and Program Director for the Friends of the Homeless, Kathy Tobin. The approximately $800 million casino resort in Springfield's tornado-ravaged South End will open n 2017. photo by David Butler II

 (David Butler II-Hartford Courant / Hartford Courant)

Kenneth R. Gosselin

HARTFORD — A federal court judge sided Thursday with the state in a suit over the expansion of casino gambling in Connecticut, dismissing a complaint that a law excludes all but the operators of Foxwoods and Mohegan Sun from opening a third casino.

MGM Resorts International, the developer of a $950 million casino and entertainment complex in Springfield, challenged a state law that allowed the Mashantucket Pequots and Mohegans to seek a location off their reservations for a jointly-run, "satellite" casino. MGM argued the law violated constitutional rights of equal protection, excluding MGM and other commercial developers from competing for a piece of the Connecticut gaming market.

In a 20-page decision, U.S. District Court Judge Alvin Thompson said the law, enacted in 2015, does not favor the tribes "to the detriment of other entities against whom it may be competing, like MGM."

"The act does not establish a process to be followed by everyone who wants to develop a proposal for and petition the General Assembly to authorize a casino gaming facility, nor does it provide that only the tribes can do so," Thompson wrote.

http://www.courant.com/business/hc-mgm-lawsuit-dismissed-20160623-story.html

MGM Brings Concerns Over Mohegan-Mashantucket Pequot Venture To Congress

MGM Brings Concerns Over Mohegan-Mashantucket Pequot Venture To Congress

Kenneth R. GosselinProperty Line

MGM Resorts International, the developer of the $950 million casino and entertainment complex in Springfield, has opened another front in its battle against a jointly run tribal casino in the Hartford area — this time in the U.S. Congress.

In a June 1 letter obtained by The Courant, the National Indian Gaming Association wrote to key members of Congress on MGM's efforts to seek legislation that would stop Indian tribes from pursuing commercial gaming off reservations.

"Our understanding is that MGM is pursuing this legislation in reaction to a joint venture between the Mashantucket Pequot and Mohegan tribes that would present competition to MGM's proposed gaming facility in Springfield, Mass.," according to a letter, sent to leaders of the Senate's Committee on Indian Affairs.

The Connecticut tribes, which operate Foxwoods and Mohegan Sun casinos, have formed a joint venture to operate a "satellite" casino in the Hartford area. The state legislature has approved the search for a location, but still must back the actual expansion of gaming off the tribes' southeastern Connecticut reservations.

http://www.courant.com/business/hc-mgm-indian-gaming-battle-20160621-story.html

Media Awakens to Subsidies to Mismanaged Tribes

Bear in mind that 'stipends' were tax-exempt.

Maybe it's time for the media to conduct some in-depth research into all of the funding Tribes receive, including health care that other Americans don't receive. And very little oversight exists.

As casinos struggle, tribes seek more federal aid

By MICHAEL MELIA
Associated Press
March 24, 2013

LEDYARD, Conn. (AP) — Once the envy of Indian Country for its billion-dollar casino empire, the tribe that owns the Foxwoods Resort Casino has been struggling through a financial crisis and pursuing more revenue from an unlikely source: U.S. government grants.

The money provided annually to the Mashantucket Pequot Tribal Nation through the Interior Department and the Department of Health and Human Services has risen over the last five years to more than $4.5 million, according to documents obtained by The Associated Press through the Freedom of Information Act. One former tribal employee says department leaders were encouraged to offset dwindling resources by seeking more federal grants.

The Pequots, who once distributed stipends exceeding $100,000 annually to adult members, are not alone among gaming tribes seeking more federal aid. Several, including the owner of Foxwoods’ rival Connecticut casino, the Mohegan Sun, say they have been pursuing more grants — a trend that critics find galling because the law that gave rise to Indian casinos was intended to help tribes become financially self-sufficient.

‘‘The whole purpose of the 1988 law which authorized Indian casinos was to help federally-recognized tribes raise money to run their governments by building casinos on their reservations,’’ said Robert Steele, a former Congressman from Connecticut. ‘‘I would argue strongly that federal money was meant for struggling tribes. Certainly the Mashantucket Pequots and the Mohegans couldn’t under any circumstances be put in that category.’’

As long as they have federal recognition, casino-owning tribes are eligible for the same grant programs as the larger tribes based on large, poverty-stricken reservations in the American West. The grants, which don’t need to be paid back, support tribal governments by paying for programs such as health screenings, road maintenance and environmental preservation.

‘‘The Mashantucket Pequot Tribal Nation is proud of the work they do with the use of federal funds when it comes to assisting the region and fellow Native Americans,’’ said Bill Satti, a tribal spokesman, who said the grants have supported the tribe’s medical clinic and repair work on local roadways.

Thomas Weissmuller, who was chief judge of the Mashantucket Pequot Tribal Court until 2011, said that near the end of his tenure the tribal council said they had distributed too much money to members and urged department leaders to pursue more federal grants. He said there was resistance from some council members, who raised questions about the effects on sovereignty, but he was personally encouraged to pursue grants by officials including the tribal chairman, Rodney Butler.

Weissmuller said he was not comfortable seeking such assistance for the tribal court system because most of the issues it dealt with were related to the casino, which is essentially a commercial enterprise.

‘‘A billion-dollar gaming enterprise should fully fund the tribal government,’’ said Weissmuller, who said that he was forced out of the job by tribal officials who told him he did not appear to have the tribe’s interests at heart on other matters.

The reversal of fortunes for the Pequots began around 2008, when Foxwoods completed a major, costly expansion with the 30-story MGM Grand hotel and casino just as the recession began to show its teeth. The following year the tribe defaulted on debt exceeding $2 billion.

Since then, the tribe of some 900 people in rural southeastern Connecticut has ended its member stipends. The Pequots have kept some other benefits in place, covering payments for members pursuing higher education and offering supplemental pay for tribal members taking entry-level jobs at the casino.

The federal grants provided to the Pequots through the Interior Department and its Bureau of Indian Affairs, meanwhile, rose from $1 million in 2008 to $2.7 million in 2011, with partial records for 2012 showing $1.7 million in grants for the year. Grants provided to the Pequots through the Indian Health Service, a division of Health and Human Services, increased gradually from $1.7 million in 2008 to $1.9 million in 2012. That money is to support health care services such as community health, nutrition, substance abuse treatment and pharmacy services.

The federal money opened the door to scrutiny by the FBI, whose investigation of tribal finances led to the January indictments of the tribe’s treasurer, Steven Thomas, and his brother Michael Thomas, a former tribal chairman. The two are accused of stealing a combined $800,000 in tribal money and federal grants. The tribal council has expressed full confidence in its treasurer.

Mohegan Tribe officials said they took pride in refusing federal grants for years, in acknowledgment that there were needier tribes. But tribal officials said they had relaxed that position as their Mohegan Sun casino, like Foxwoods, has faced growing gambling competition from neighboring states.

‘‘It’s a sign of the times. Everybody is’’ seeking grants, Mohegan Chairman Bruce ‘‘Two Dogs’’ Bozsum said. ‘‘There’s some that we qualify for and it helps us to keep everybody healthy and working. At the end of the day, why shouldn’t we apply for it? If we get approved, it’s always for a good cause, usually health or jobs created.’’

Tribal officials said they receive modest grants to contribute to the cost of health care for their 2,000 members.

The tribe that owns the Soaring Eagle Casino and Resort in Michigan, one of the country’s largest Indian casinos outside of Connecticut, has been aggressively pursuing grants in areas including environmental protection and health services as it struggles with the weak economy, according to Sylvia Murray, grants and contracts manager for the Saginaw Chippewa Indian Tribe.

Sam Deloria, director of the American Indian Graduate Center in Albuquerque, N.M., said he has no issue with tribes pursuing grants for which they are eligible. It’s no different, he said, from the state of Alaska participating in federal programs despite the annual payouts to residents from the state’s oil savings account.

As the federal money reflects financial distress for gaming tribes, however, he does worry that their struggles ultimately could have a ripple effect throughout Indian Country and affect the ability of tribes to participate in the marketplace.

‘‘It has got to raise a set of issues that either in the courts, or in the Congress, or in the marketplace, eventually it will get people looking at tribal participation in business in a different light,’’ he said.

http://www.boston.com/news/local/rhode-island/2013/03/24/casinos-struggle-tribes-seek-more-federal-aid/ZEhesuKCsuSsBTnuBT2NSL/story.html

The Sun Chronicle : Your source for local news

www.thesunchronicle.com/

You +1'd this publicly. Undo

As casinos struggle, tribes seek more federal aid. LEDYARD, Conn. - Once the envy of Indian Country for its billion-dollar casino empire, the tribe that owns the ...

 

 

As casinos struggle, tribes seek more federal aid | Boston Herald

bostonherald.com/.../as_casinos_struggle_tribes_seek_more_federal_...

You +1'd this publicly. Undo

21 hours ago – Several other gaming tribes have been pursuing more federal grant money — a trend that critics find galling because the primary purpose of ...

 

 

 

 

Less Safe at Foxwoods and Mohegan Sun

Buried in debt from the heady days of Casino Capitalism when banks loaned without restriction and Foxwoods and Mohegan Sun thought the gravy train was endless, cost cutting measures are necessities.

The cost of hosting two Tribal Casinos has left the State of Connecticut cash-strapped and even irresponsible ideas suddenly seem sensible.

Tribes are not mandated to report CRIMES as others are since they are Sovereign, so we may never know the accurate extent of unreported CRIMES. This places the public in jeopardy.

Troubled Tribal Police Seek Bigger Foxwoods Role

By MICHAEL MELIA Associated Press

May 31, 2012

LEDYARD—

A Connecticut tribe is moving to give its own police department a larger role inside its Foxwoods Resort Casino, but several former department employees say it can barely manage to patrol the tiny reservation, let alone the Western Hemisphere's largest casino.

Mashantucket Pequot Tribal Nation officers drive cruisers and carry guns, but the former employees say they resemble private security guards more than agents of the law. The department takes orders directly from tribal council members, blocks officers from pursuing investigations and has turned a blind eye to the sale of illegal drugs, ex-officers said in interviews with The Associated Press.

"The chief doesn't want tribal members to be investigated, to be prosecuted in any way, because then it comes back on him," said Steve Saucier, who worked part-time for the department until leaving in November. "If we do arrest somebody and it goes to tribal court, they throw it out. It does absolutely nothing."

The tribe has been pressing for its own police to replace state troopers in the casino — a change that could bring millions of dollars in savings annually for the Pequots, who have to reimburse the state for security coverage and are struggling with more than $2 billion in debt. The office of Connecticut's governor, which wants to put more troopers on the roads, has already reduced the security bill conditionally as it waits for tribal officers to obtain certifications they would need to be able to arrest non-tribal members.

In response to the AP's findings, Mike Lawlor, the governor's liaison on criminal justice policy, said the agreement depends on tribal police agreeing to abide by the state's standards. He said state attorneys are working out how to determine whether and when the tribe is ready.

"It's definitely in their interest to get them into a position where they would have full-fledged powers," Lawlor said. "If they don't, they won't get them."

The tribal council defended its police force.

"The Mashantucket Pequot Tribal Nation Police force is fully trained and very competent to continue the policing of our gaming enterprise," the council said in a written statement.

One of the most pressing obstacles would be manpower.

The Pequots told the Connecticut governor's office as part of their proposal in July 2011 that they have 15 police officers, according to documents obtained by the AP through a Freedom of Information Act request.

But the tribal police currently have only nine officers, including the chief and two officers who recently joined from a training academy, according to two tribal government employees who spoke on condition of anonymity because they are not authorized to discuss internal affairs. Former officers say the department is stretched so thin that officers can barely cover shifts and emergency calls about fights and domestic disputes at times have to wait. Roughly 900 tribal members live in and around the Pequots' two-square-mile reservation. [And pay no taxes.] Some tribal officers have American Indian heritage but they are not required to be Pequot members.

"There were calls we couldn't get to right away, calls that had to wait because we didn't have any officers to send," said Robert Standeford, who left the tribal police in 2010 after a decade of service. "I always called for state backup when we needed it, but that wasn't a practice they wanted."

The chief of tribal police is Daniel Collins, a Marine Corps veteran who requires that officers salute him. The tribe did not respond to requests to interview Collins.

Several former officers said the chief takes instructions directly from tribal members. They say he did not direct officers not to arrest certain individuals, but would classify sensitive cases as investigations and allow them to languish indefinitely.

In one case, Standeford said, the police chief told officers not to pursue what could have been a major drug bust. The tribe was holding an annual outdoor celebration about five years ago in a part of the reservation known as Stump Mountain when officers stopped a man with a large baggie full of marijuana. The man told officers he got the drugs from a white van that was loaded with marijuana. But Standeford said the chief told officers to release the man, had them dump the drugs on the ground and spoke with the van driver, who then drove off the reservation.

"You don't just dump drugs when you tell everyone in the community we're working to make it better," he said.

Foxwoods, which receives tens of thousands of visitors daily, currently has state troopers stationed around the clock inside the casino, where they made 181 arrests in 2010, mostly for assault or larceny. The Pequots have been required to pay $4 million annually for the services of the state Department of Public Safety including about state 20 troopers, who are backed by tribal police and a large private security force.

In letters to state government officials last summer, tribal Chairman Rodney Butler said the Pequots would no longer pay for troopers to be stationed in the casino, and said the tribe would pursue a lawsuit if an agreement was not reached with the governor's office.

Ultimately, the state agreed to reduce assessments for the Pequots as well as the Mohegan Tribe, which owns the nearby Mohegan Sun casino. Lawlor said the Mohegan police have the certifications needed to assume a larger role as soon as the paperwork is processed, but he said it would take longer for the Pequots' police.

Tom Olsen, a police officer for the neighboring town of Ledyard who worked for Pequot police in the 1990s, said tribal officers have struggled with many of the same issues for years.

"The administration of that police department has to answer in a different way that a town's department would. They are beholden to what the council might say because they hold the purse strings," he said. "The bottom line is there are different rules there."

http://www.courant.com/news/connecticut/hc-ap-tribal-police-foxwoods-0601-20120531,0,2859258.story

Note to Palmer, MA: Check the financial insolvency of your partner

The Mohegan Tribe has fanciful dreams of a Slot Barn in Palmer, Massachusetts that seem to be dashed by their financial implosion.

Surely, the capital markets, recently devastated by 'casino capitalism' will be anxious to loan more $$$$, especially after Moody's Lowers Mohegan Tribal Authority To Highly Speculative.

Maybe someone could share this with perennial Slot Barn Cheerleader, Paul Burns.

Financial solvency must be a significant consideration for Beacon Hill.

From SEC Filing
[worth reading in its entirety]

Risks Related to Our Business

Town of Montville Agreement

In June 1994, the Tribe entered into an agreement with the Town of Montville, or the Town, under which the Tribe agreed to pay the Town $500,000 annually to minimize the impact of Tribe’s reservation being held in trust on the Town. The Tribe has assigned its rights and obligations under the agreement to us.

[Included to call your attention to one of the reasons Mohegan Sun is immensely profitable. When you don't pay your fair share of taxes or contribute adequately to your host community, of course, it enhances profitability. That's one of the problems with Indian Casinos across the country.]


We currently have and will continue to have a significant amount of indebtedness. As of September 30, 2010, our debt totaled $1.64 billion. As of September 30, 2010, $527.0 million was drawn on the bank credit facility. Inclusive of letters of credit which reduce borrowing availability, and after taking into account restrictive financial covenants under the bank credit facility, line of credit and note indentures, we had approximately $31.4 million of borrowing capacity under the bank credit facility as of September 30, 2010.

Our substantial indebtedness could have significant adverse effects on our business. Such adverse effects include, but are not limited to, the following:

• make it more difficult for us to satisfy our debt service obligations;
• increase our vulnerability to adverse economic, industry and competitive conditions;
• require us to dedicate a substantial portion of our cash flows from operations to payments on our indebtedness, thereby reducing the availability of our cash flows to fund working capital, capital expenditures and other general operating requirements;
• limit our flexibility in planning for, or reacting to, changes in our business and the gaming industry, which may place us at a disadvantage compared to our competitors with stronger liquidity positions, thereby hurting our results of operations and ability to meet our debt service obligations with respect to our outstanding indebtedness;
• restrict us from exploring business opportunities;
• place us at a competitive disadvantage compared to our competitors that have less debt; and
• limit, along with the financial and other restrictive covenants in our outstanding indebtedness, the ability to borrow additional funds for working capital, capital expenditures, acquisitions, debt service requirements, execution of our business strategy or other general operating requirements on satisfactory terms or at all.




Cowlitz not worried despite casino backer's growing debt
Mohegan tribe owes $2.1 billion

In its annual filing with the U.S. Securities and Exchange Commission, the Connecticut-based Mohegan Tribal Gaming Authority, thought to be the muscle in the Cowlitz Indian Tribe’s plans to build a casino in Clark County, paints a picture of a company straining to handle its debt.

That load totals $2.1 billion, according to the filing, which was posted online Thursday by the SEC.

The gaming authority reported $1.64 billion in debt and other obligations to total $2.1 billion; $1.2 billion of that debt is due in one to three years.

On Dec. 23, the Bureau of Indian Affairs announced that it had approved the Cowlitz Indian Tribe’s application to take 152 The gaming authority reported $1.64 billion in debt and other obligations to total $2.1 billion; $1.2 billion of that debt is due in one to three years.

On Dec. 23, the Bureau of Indian Affairs announced that it had approved the Cowlitz Indian Tribe’s application to take 152 acres near La Center into trust to establish a reservation and operate a casino.

The tribe filed the application in 2002.

Cowlitz Chairman William Iyall, who said last week that the $510 million casino-hotel complex would be built in phases, said Thursday that the Mohegan’s debt would not be a deal breaker.

The Mohegan Tribal Gaming Authority is the gambling arm of the Mohegan Tribe, and operates the Mohegan Sun in southeastern Connecticut and Mohegan Sun at Pocono Downs in Plains Township, Pa. In addition to partnering in 2004 with developer and Cowlitz Tribe member David Barnett to form Salishan-Mohegan, LLC, the Mohegan group also has been working on plans to manage casinos in Massachusetts and Wisconsin.

The Mohegan’s 160-page SEC filing addresses the BIA’s approval of the Cowlitz trust application.

The Mohegans are the majority partner in the company that would manage the casino for seven years in exchange for 24 percent of net revenues.

It ended its summary of the Cowlitz project on a cautionary note.

“We can provide no assurance that these conditions will be satisfied or that the necessary financing for the development of the proposed casino will be obtained.”

The Mohegans listed declining revenue — net income dropped from $149 million in fiscal year 2008 to $9.7 million in fiscal year 2010 — and increasing competition from other gaming operations as key areas of concern.

As for risks, the Mohegans wrote that “our substantial indebtedness could adversely affect our financial condition.”

The group currently has approximately $31 million of borrowing capacity.

The debt, among other things, “could restrict us from exploring business opportunities.”

The Mohegans, which must report their financial status to the federal government because its debt is traded publicly, [otherwise, this information would be unavailable to you] wrote that in light of the “uncertainty” about the Cowlitz project, it has written off $9.4 million, or approximately one-third of its investment.

Moody's Lowers Mohegan To Highly Speculative

Some Palmer, MA residents still have fantasies of a Destination Slot Barn regardless of the reality befalling Mohegan Sun, ever-eager pursuer.




Moody's Lowers Mohegan Tribal Authority To Highly Speculative

DOW JONES NEWSWIRES

Moody's Investors Service moved the Mohegan Tribal Gaming Authority to highly speculative territory, saying the operator of casinos could find it difficult to refinance significant debt maturities without some impairment to bondholders.

Payments To "Foxwood's" Tribal Members To End

Lost amidst the Gambling Vultures Feeding Frenzy on Beacon Hill, the article below was overlooked.

It might be suggested that the revenue surging across the border has diminished. Maybe the Beacon Hill Bobble Heads have lost their raison d'etre.

Saturday, July 10, 2010
Tribal Payments To Mashantucket Pequot Tribal Members To End In Six Months

The approximately $100,000 that each Mashantucket Pequot adult receives each year will be ending in six months, according to a letter by the Mashantucket Pequot Tribal Council which was obtained by The Day newspaper.

The Feather News has heard rumors to this effect for the past two months (from the flying man and the mystical artist) but it has not been reported publicly until today.

The Mashantucket Pequots have a $700 million credit line coming due next week and the Tribe is negotiating with their creditors over their inability to pay that off which seems to be the main reason why the Tribe has announced the end of tribal payments to its members.

Today's front-page article in The Day newspaper, written by Brian Hallenbeck who covers the local Indian tribes, reports, "The payments, which are made to adult tribal members, have been significantly reduced in recent years but ranged last summer between $90,000 and $120,000 a year, on average, a tribal source said at the time."

Although the Tribe owes more than $2 billion, the $700 million line of credit that is coming due next week was loaned to the Tribe by a banking syndicate led by the Bank of America.

The Mohegan Tribe, meanwhile, has a credit line of $800 million that was loaned to its gaming arm and which comes due in two years. According to Mohegan Tribal Gaming Authority conference calls with analysts, the Tribe hopes to have negotiated a plan with its creditors by the end of September. The Mohegan Tribal Gaming Authority's total debt is about $1.6 billion.

Were two of the principle partners for Trading Cove Associates, the Mohegan Sun's former casino management company that is currently receiving five percent of the casino's revenues as a result of a buyout agreement that ends in four-and-a-half years, demanding to be seen at the tribal government building this week?

Both tribes hold a casino monopoly in Connecticut and generate between $2 billion to $3 billion in revenues from the casinos on the two reservations.

CT Slot Parlors: How Do You Define Bankruptcy?

Mashantuckets, Mohegans lack flexibility when dealing with debts
Indian Gaming Act restricts solutions
--------------------------------------------------------------------------------
By WILLIAM SOKOLIC
For The Norwich Bulletin
Posted Oct 11, 2009 @ 11:25 PM

--------------------------------------------------------------------------------

In May 1978, Resorts opened in Atlantic City, N.J., as the first casino outside Nevada.
A decade later, Merv Griffin bought the property. Almost a decade after that, Griffin sold the company to Sun International, which sold it to Colony Capital in 2001 for a huge loss.

Each new owner assumed the debt of the previous ownership.

This year, the creditors are seeking to take over ownership from Colony Capital for failure to pay its debt service.

At the center of all these changes was debt — an issue very much on the minds of the Mashantucket Pequot Tribe, owners of Foxwoods and MGM Grand at Foxwoods, and the Mohegan Gaming Tribal Authority, which owns Mohegan Sun.

Millions, billions owed

The Mashantuckets reportedly have debt obligations of more than $2 billion. The Mohegans have to repay $150 million in $30 million increments, beginning next year, the result of an agreement with the bank to retire a $330 million note.

Neither tribe can seek any of the options available to previous owners of Resorts. They cannot look for a buyer to take the load off their shoulders. Or sell off a gaming hall to reduce debt. The Indian Gaming Regulatory Act says only a tribe can own a casino, said Shawn P. Pensoneau, a spokesman for the National Indian Gaming Commission. If property is on the reservation, the land is owned and held in trust by the federal government.

The Mashantuckets have retained Miller Buckfire & Co. LLC as a financial and restructuring adviser and Weil, Gotshal & Manges LLP as legal counsel to provide professional services in connection to restructuring its large debt.

Mohegan Sun faces similar approaches.

“We’ll have difficulty making those payments on the $150 million, so we are considering debt restructuring,” said Leo Chupaska, Mohegan Sun’s chief financial officer. “We are studying what we can do to take care of the issue.”

More options

Nontribal gaming companies have more options. They can issue additional debt or stock, he said.

“The tribes can’t sell off or convert anything to equity,” said Clyde W. Barrow, director of the Center for Policy Analysis at the University of Massachusetts Dartmouth.

Said Chupaska, “If the casino goes belly up, creditors can’t take the land.”

And while tribes can lease land for retail and restaurant operations — and can hire a company to manage the casino — it cannot sell its casino assets to a nontribal entity.

There are a lot of private operators on Indian reservations, Chupaska said. Mohegan Sun has a number of third-party retailers who pay a leasing fee. Most pay a percentage of revenue, he said.

“The regulatory act is specific for Indian gaming, not for retail,” Pensoneau said.

So what’s a financially strapped tribe to do?

If a tribe went into default, creditors could hire someone to run the casino, but the management team would have to be licensed by the National Indian Gaming Commission, Chupaska said.

“It’s difficult to pass muster with the NIGC,” he said. “The only thing we can do to raise money is to go into debt markets or issue bonds, so we’re at a little disadvantage.”

Like foreign nation

Barrow likens it to trying to collect on a debt from a foreign government.

“You can cut them off,” he said. “But if they do not have money, you can’t get blood from a stone.”

They may declare bankruptcy.

“But don’t expect an Obama bailout,” he said.

If banks are so inclined, they can write off the debt as they do for mortgages, restructure to lower interest rates, or lengthen the time to pay to back, Barrow said. Those steps are in the bank’s self-interest, since they cannot take over a casino.

Meantime, it’s business as usual, Chupaska said.

“We do not anticipate that the financial restructuring being considered by the tribe will affect our employees, customers, vendors or business partners,” he said. “The tribe does not plan to make any additional comments regarding this matter at this time.”

.

Whew! Who knew our perennial casino cheerleader was an expert in such complex law that others avoid comment? Pity he didn't offer advice to the other Tribes that have defaulted.

.

This performance sends chills through the capital markets.

.

And it certainly should raise alarms after the casino gambling investment fiascos.

.

This highlights a complex issue the Attorney General touched upon in her testimony before Senator Spilka's Casino Lovefest in June 2009.

.

Who will vet prospective owners? What are the consequences of a bankruptcy?

.

Other venues have prohibited gambling interests from making political contributions.

.

If the depth of support is "Ca Ching," it sure raises questions.

.

Big Dig, anyone?

Dear Mr. Joseph J. Turek:

Foxwoods is imploding. Predatory Gambling revenues are declining. Indian casinos are defaulting on their loan payments. Discretionary income is declining. Personal income is stagnant. Unemployment is rising.

And some, dazzled by the fool's gold of predatory gambling believe --

Casinos are a hot topic as unemployment rates rise and the economy continues its dismal slide.

Where is this magical source of money supposed to come from? Manna from Heaven?

.

This seems like an acknowledgment that gambling will divert dollars and interest --

[Greater Springfield Convention & Visitors Bureau board chairman Gregory B.] Chiecko said the board would like funding for marketing to support arts and restaurants affected by a casino.

.

As Mr. Turek organized his impressive rally of 15 people, some of whom seemed to be children and family members, here's what he said --

[newly formed Pioneer Valley Jobs Coalition president, Joseph J.] Turek said he’d like to know the real reason why some oppose Connecticut-based Mohegan building a casino across from the Massachusetts Turnpike exit on Thorndike Street (Route 32).

Dear Mr. Turek:
.
You don't know me, but ....
.

I'm willing to excuse any lack of information on your part that maybe you were out of any communication or some reason fully unknown to me.

.

It is known that predatory gambling is wildly profitable and the industry can afford well paid lobbyists who drowned out other voices. Most in the media readily regurgitate the information. Those expensive PR firms keep them on message - Jobs, blah, blah, blah, revenue for children, seniors, local aid, blah, blah, blah.

.

Mohegan Sun is that much more profitable because they only pay their host community, Montville, CT, $500,000 per year with no escalation clause and no slots participation and starve the community with the impacts.

.

The CT Casinos pay no state sales tax, no motel taxes, no corporate tax and so on. They don't have to abide by the rules that you and I do.

.

Both CT casinos are currently exempt from the liability created by allowing drunk drivers to take to the roads. CT Slot Parlors: Good Neighbors? Think Not!

.

Your proposed business partner allows drunk drivers to get behind the wheel, kill and maim people and has taken no corrective action to address the issue.

.

When Middleboro and surrounding communities first realized a Mega Casino was about to be forced on us with no public discussion or consideration of the impacts, we knew little about predatory gambling, but worked to educate ourselves and share information with each other.

.
Allow me to provide some information.
.
You might consider the wealth of information available here:
.
United to Stop Slots in Massachusetts

Resources

Stop Predatory Gambling
.

When you have digested that information that merely scratches the surface, there's far more we can pass along.
.
You might want to consider We Can Always Build More Casinos, Right? --
.
A 2005 study by the Federal Reserve found a statistically significant relationship between proximity to casinos in Mississippi and bankruptcy rates in the region, which includes impoverished states like Alabama and Tennessee.

.

The Federal Reserve has no position on Predatory Gambling.

.

Or consider Les Bernal's Top 10 Best Practices in the Predatory Gambling Trade

.

My fellow bloggers, listed to the right of this screen have done a great job addressing the many issue surrounding predatory gambling.

.

Recently, former Attorney General Scott Harshbarger moderated a forum in Waltham that allowed both sides of the discussion to be debated respectfully.

.

Last week, Rep. Tom Conroy conducted a forum in Sudbury.

.

Maybe you didn't know about those, but we hope to see you at future forums, that is, if you truly want to understand the issue.

.

The State of New Jersey employs 1500 state employees dedicated solely to gambling. What will that cost us, Massachusetts taxpayers? In fairness, let's include training, office costs, new state vehicles and gas and maintenance, pension and health care.

.

Maybe it was this - AG Coakley got it right!

.

Independent research has shown that for every $1 earned in revenue from casinos, $3 is spent in the costs associated with them.

.

Last time the issue was voted on, Rep. Conroy prepared a report that was conservative and failed to consider many of the costs, but was persuasive. The realistic projected revenues generated by gambling will equal the reductions in state lottery revenues. Isn't this Net Zero?

.
This is not easy to dismiss because the lottery returns 25 cents of every dollar to cities and towns. Predatory Gambling returns only a fraction of that.
.

Today's Boston Globe included State set to recover sooner than US Job losses slowing, housing on rebound. That seems to mean that what we are going through is temporary and will end. Predatory Gambling won't.

.

If you truly want answers, attend a forum, ask questions.

.

But please, stop condemning those who have done their homework, examined the experience of many others, read numerous books and refused to accept "inevitable" for an answer.

.

It's time to insist on a cost/benefit analysis as New Hampshire has done before we embark on this misadventure.

CT Slot Parlors: Good Neighbors? Think Not!

When I saw TWO WOMEN GET INTO FIGHT IN FOXWOODS LADIES ROOM, I was disappointed that it wasn't the punchline of a joke, but rather 2 women fighting in a Foxwoods Resort Casino restroom.

.

The blogger's comment?

.

EDITORIAL FOOTNOTE: Does either Connecticut casino (Mohegan Sun Casino, Foxwoods Resort Casino, MGM Grand at Foxwoods) need this kind of PR?

.

For years, both casinos have failed to accept their own social responsibility and ensure that patrons leaving their wildly profitable sovereign territory were sober.

.

Were either slot parlor a commercial entity, their liquor licenses would have been revoked years ago and the judicial system would have compelled compliance.

.

MADD has focused on changing the laws and reducing the numbers of intoxicated drivers on Massachusetts roads with which I'm familiar.

CT MADD reports -- In Connecticut 101 people were killed in 2007 in alcohol related crashes, down 12% from the previous year.

It appears that Connecticut's Attorney General may have some impact on changing the business behavior of the slot parlors --

HARTFORD, Conn. (Legal Newsline) - Connecticut Attorney General Richard Blumenthal on Monday said tribal casinos are not immune from state laws pertaining to liquor sales.

Blumenthal submitted an amicus brief to the state Appellate Court asking the court to overturn a recent trial court ruling that exempted tribal casinos from certain liquor laws.

Blumenthal filed the brief in support of Emily Vanstaen-Holland and her mother, Susan Holland, who are suing the Mohegan Tribal Gaming Authority and others in connection with an accident in which Emily Vanstaen-Holland, a pedestrian, was struck by someone allegedly intoxicated after drinking at Mohegan Sun.

Sometimes, financial liability is the only thing that makes a good neighbor.

Too bad the blogger isn't worried about these folks and the others killed after feeding the slots --

In March, a 23-year-old Navy sailor, who later reportedly told police that he had four or five drinks over the course of the evening at a Mohegan Sun club, struck a van carrying seven students headed to Boston's Logan Airport.
.
Elizabeth Durante, one of the traveling students, died at the scene. Less than a month later, a local construction worker, who had been drinking at the same bar, struck and killed a 59-year-old Willimantic woman.

When you make your money from predatory gambling, you're worried about bad pr?

Impartial? Think Not!

Recently, State House News circulated the article below --



TOP DeLEO DEPUTY SAYS FISCAL CRISIS WILL LIKELY NUDGE HER ON GAMBLING: The state's economic doldrums will likely sway a longtime gambling opponent and key ally of House Speaker Robert DeLeo in favor of expanded gambling in Massachusetts. Assistant House Majority Whip Patricia Haddad said she had instructed an intern to compile information for her and planned to study it, but said she had moved away from her stance as an "absolute no" vote on gambling. "I've never been a fan," Haddad told the News Service. "But I don't think we have the luxury anymore." She added, "I have to find my way to a different place, I think." DeLeo is likely to encourage a mix of casinos and slot machines at racetracks, according to an article in Gambling Compliance, a London-based gaming market analysis firm, written by former Boston Herald columnist Scott Van Voorhis. Many House members who joined then-Speaker Salvatore DiMasi in thwarting a 2006 slots bill, on a 100-55 vote, are signaling they may change positions. Haddad (D-Somerset) said she has voted against slots consistently save for one time early in her House career, and said she had been compelled in part by last year's ballot vote to end dog racing. "That was 2,000 jobs," Haddad said. "I felt really terrible about that."

Before we get to the meat of the subject, since I'm new to this, I pulled up the State House News site.

Flashing across the site, was the advertising banner for O'Neill and Associates.

The Secretary of State site, for 2008, includes this entry --

The Mohegan Tribe
$36,000.00

Does that raise any questions about the impartiality of State House News?

I have had several opportunities to challenge Senator Pacheco when he proclaims the employment numbers.

Senator Pacheco states that closing 2 greyhound tracks will effect

1400 FAMILIES.

The number is meaningless and continues to grow, it might appear, from being fed a diet rich in manure.

In Watch the Numbers!, I linked to a ProJo article that indicated --

Supporters of the dog racing bill say it's necessary to save

225 jobs

-- including pari-mutuel clerks, bartenders and security workers.....

This is what was reported in RI Greyhounds Gone Saturday, Aug 8 ----

Twin River has handed out layoff notices to

9 full-time employees

and

18 part-time workers

in anticipation of Saturday’s scheduled suspension of dog racing at the Lincoln track.

It might seem that the actual numbers would be available from the Gaming Commission. On the Mass.Gov site, that information can be easily found where exactly? I must have missed it.

When facts and logic fail, leave it to the Gambling Cheerleaders to make things up.