Debt restructuring sought by River Rock Casino World Casino Directory Almost immediately upon the rival casino's opening, River Rock's revenues were just about cut in half, according to tribal officials who blamed the ...

River Rock Casino seeks to restructure debt

CLARK MASON

THE PRESS DEMOCRAT | August 5, 2016

River Rock Casino, which took a financial blow after the bigger, glitzier Graton Resort and Casino opened nearly three years ago, is offering to restructure its overdue debt, but in a deal that would pay bondholders a fraction of what they are owed.

The offer comes more than two years after the Geyserville-area casino operated by the Dry Creek Rancheria Band of Pomo Indians defaulted on interest payments on $165 million owed to bond holders.

In a proposal announced Thursday, River Rock Entertainment Authority, the operator of Sonoma County’s oldest tribal casino, said it would offer cash payments amounting to 30 percent of the principal amount of outstanding senior notes that are due in 2018.

River Rock intends to borrow up to $50 million from Benefit Street Partners, a New York City-based investment firm, to finance the restructuring and settlement deal.

A gaming analyst on Friday indicated bondholders may have few options other than to accept the offer.

“There’s only so much creditors can extract from a casino under stress,” said Alex Bumazhny, a Fitch Ratings senior director. “Thirty cents on the dollar is still quite a bit of debt.”

He said tribes are quasi-sovereign entities that can’t be put through bankruptcy, and courts are also a risky arena for creditors of tribal casinos.

River Rock was the first tribal casino in Sonoma County when it opened in 2002. It enjoyed a monopoly until Graton became the second in the county with the opening of its large gambling hall next to Rohnert Park in late 2013. Revenues plummeted almost immediately at River Rock by about 50 percent, according to tribal officials, who blamed it on the new competition from Graton.

A year ago, David Fendrick, River Rock Casino’s general manager, said that drop stayed pretty consistent and revenues were still down in the mid 40 percent range, compared to before Graton opened.

On Friday, Fendrick said business at River Rock has leveled off. “We’ve experienced no further erosion of business since the initial drop from Graton. Business is holding steady,” he said in an email.

River Rock reported $124 million in revenues in 2010, the last full year it publicly disclosed such financial information.

Last year, the Dry Creek Pomos also renegotiated the amount they had agreed to pay Sonoma County for off-reservation impacts from the casino for things like sheriff’s coverage and road maintenance.

The tribe reduced by $33 million the amount it was obliged to pay the county under a new payment schedule that was extended from 2020 to 2030. In return, the tribe is precluded until early 2025 from trying to build a casino on land it owns south of Petaluma.

River Rock has been forced to make a series of cost cutbacks as a result of its precipitous drop in revenues. Last year it employed 388 people, down from a high of 600.

The number of slot machines and table games were also reduced from a previous high of 1,300 slots and 22 table games. Last year, it had 1,150 slots and 18 table games.

Fendrick declined comment on the planned restructuring and resettlement proposal, which was described in a news release.

Dry Creek Tribal Chairman Chris Wright, who typically does not speak to the media, did not respond to a request for comment.

In addition to the 30 cents on the dollar that River Rock intends to pay bondholders, the press release also mentioned cash held in a “Parity Lien Debt Account” that will be paid to bondholders. It did not state the amount.

Institutional holders of River Rock’s senior notes are represented by an “Ad Hoc Holder Group,” which must approve the restructuring of the debt.

River Rock intends to hold a conference call with the group to discuss the offer. Also participating will be Stuyvesant Square Advisors, acting as financial advisor to River Rock, the Senior Notes trustee, and attorneys for all the parties.

To obtain financing for the settlement, River Rock will need to show it’s supported by majority of the holders of the principal amount of the senior notes.

Most of the half-dozen or so other tribal casinos across the country that defaulted on their obligations convinced creditors to accept new bonds with a lower face value, or other modifications, Fitch Ratings analyst Bumazhny said Friday.

“Usually it’s new debt to an existing creditor rather than cash,” he said of the typical restructuring, adding that River Rock’s cash offer could be attractive.

“Usually it’s safer to take cash than a new piece of debt,” he said.

http://www.pressdemocrat.com/news/5934053-181/river-rock-casino-seeks-to

Oldies, but Goodies

In 2010, the articles below were posted along with their links, some of which are no longer valid.

This blog was begun and included articles posted in their entirety because frequently the articles are not archived.

The Propaganda is always the same, the outcome merely promises.

Casinos sold for bargains

This should have sent chills through the capital markets - meaning

they'll have to provide more equity and pay a higher interest rate,

although with the Fed trying to push down long term rates, who knows?

Casino Tribes Default

Florida: Gambling Addiction

**The results of the survey showed nearly one in five inmates were problem gamblers.
My note --

**That's 20% of the prison population that has a gambling problem. It's costs such as this that Beacon Hill has been asked to consider in an Independent Cost Benefit Analysis that they have refused to conduct.
What will this cost taxpayers of the Commonwealth?

 

Lenders Wary Of Indian Casinos

Mohegan Sun and Connecticut’s other resort casino to the north — Foxwoods in Mashantucket — have more than $3 billion in debt thanks to ill-timed expansions and payments due at the onset of the recession. Both casinos are attempting to refinance their debt, possibly forcing their lenders to take massive losses. [forcing investors and taxpayers to pick up the tab]
On Sept. 21, Moody’s credit rating service announced a possible downgrade of the Mohegan Tribal Gaming Authority’s rating, citing payments of $527 million and $250 million due in 2011 and 2012.Despite the tribe’s annual $1.4 billion net revenues for its Connecticut and Pennsylvania locations, Moody’s said weak consumer demand for casinos, limited near-term growth possibilities for the Mohegan Sun casino, and the possibility of Massachusetts opening to casinos could lead to the downgrading of the tribe’s rating.The rising debt payments for Foxwoods and Mohegan Sun couldn’t have come at a worse time for the two Connecticut casinos. Slot revenue dropped steadily over the past five years; and the fiscal year that ended in June was the worst 12-month period of gaming revenues since 2001 for Mohegan Sun and since 1996 for Foxwoods.

Las Vegas: $18 billion loans

http://middlebororemembers.blogspot.com/2010/10/las-vegas-18-billion-loans.html

This is being mailed all over --

Delaware: Racinos whine about costs

http://middlebororemembers.blogspot.com/2010/10/delaware-racinos-whine-about-costs.html

 The article below is available by subscription only so is

included in its entirety.

 

This is really significant because Steve Norton was posting as

himself [as far as I know] after all of the local articles and

touting how wonderful Atlantic City Casinos were.

 

If you go to my blog and enter 'Steve Norton' in the search,

I posted a lot about his comments - and went after him every

time I found his comments.

 

Steve Norton = Centaur = Northeast = Palmer & New Bedford

 http://www.ibj.com/indiana-live-swamped-by-debt-faces-potential-default/PARAMS/article/22866

Indiana Live swamped by debt, faces potential default

Francesca Jarosz

October 16, 2010

 

 

Related News and Opinion

• Indiana Downs cancels horse races after complaints

• Two central Indiana racinos debut amid tough economy

• Racinos may push gambling's limits

• Shelbyville, county plan economic development projects

• State gambling revenue expected to stay flat

 

 

Owners of the Indiana Live racetrack and casino face an interest payment on the lion’s share of their $544 million in debt next month, as credit analysts continue fretting about the company’s ability to pay its bills.

Rating agency Standard & Poor’s noted that the Shelbyville venue boosted revenue 25 percent in the first quarter of 2010. But they say that hasn’t allayed their concerns about Indiana Live’s massive debt.

Most of the debt is in the form of $440 million in bonds, which have required interest payments in May and November. The size of the November payment wasn’t disclosed in public documents; Indiana Live’s total interest expense this year is expected to be $54 million.

S&P analysts say default could be imminent.

“It’s something we’ve seen coming and are anticipating relatively soon,” S&P’s Ben Bubeck said. “You can only be generating less than you need for so long.”

In what could be another sign of financial distress, Indiana Live in recent months cut ties with The Cordish Cos., the Baltimore-based developer hired to manage Indiana Live.

Sources close to the matter confirmed the split, but would not share details while the parties try to reach a peaceful settlement on the early termination of the 10-year contract. The casino paid $7.2 million in management fees last year, according to a filing with the state.

A Cordish partner did not respond to requests for comment, and Ross Mangano, chairman of South Bend-based Oliver Racing LLC, which owns Indiana Live, would not discuss the Cordish contract.

Mangano also would not share details about Indiana Live’s finances. But he emphasized that the company is working to improve its financial condition, adding there is “no imminent problem.”

“We’re doing everything in our power to address our balance sheet and improve it,” Mangano said. “We’ve been dealing with this debt from day one and we’re still dealing with it.”

Both Indiana Live and Indianapolis-based Centaur Inc., owner of Hoosier Park in Anderson, borrowed heavily after the General Assembly in 2007 allowed the horse tracks to add slot machines in return for a $250 million licensing fee.

The slots parlors, which opened the following year, have drawn smaller crowds than projected, in part because of the recession. Centaur slid into Chapter 11 bankruptcy in March of this year and is selling off holdings in Colorado and Pennsylvania to reduce debt.
In the upcoming session of the General Assembly, lobbyists for both racinos plan to appeal to lawmakers for help. The want an adjustment to the venues’ taxing formula that could provide up to $12 million per year in relief.

But lawmakers say passing such a measure will be a tough task in a year when the state is hurting for money. And even if it were to pass, some predict that won’t be enough to put their debt-saddled owners on solid financial footing.

Feeling the strain

Indiana Live increased its gross revenue from $48 million during the first three months of 2009 to $60 million during the first three months of this year. But a July S&P report said the improvement wasn’t enough to justify a rating upgrade. Since October 2008, Indiana Live has carried a rating of CCC with a negative outlook, close to the bottom of S&P’s scale.

The S&P report noted that, as of March, the company had no remaining availability under its $25 million line of credit.

“We still feel concerned that it’s not enough of a ramp-up to provide the cash they need to meet their fixed charges,” said Ariel Silverberg, an S&P credit analyst who helped write the report.

Silverberg and other analysts wrote in the report that debt restructuring is likely, a move that potentially could include bankruptcy.

In 2009, the company brought in $244 million in revenue. But after expenses such as $102 million in gambling taxes and $62 million in interest expense, it wound up with a $59 million loss.

In March, the company’s auditing firm, Somerset CPAs, echoed the concerns of credit analysts, estimating Indiana Live would need $25 million beyond the cash generated from operations to pay its bills this year.

“The company does not currently have enough capital to fund operations for the next year considering required debt term payments, related interest payments, and capital and operating lease obligations,” auditors wrote in the report.

In addition to borrowing to pay the state’s slots-licensing fee, Indiana Live spent $210 million to buy gambling equipment and design and build its gambling facilities. Interest on most of the debt is 11 percent.

Experts say the licensing fee and the slots rollout aren’t all that’s dragging down the racinos.

Alan Klineman, a chairman of the Indiana Gaming Commission in the 1990s, said the number of casinos in the state, plus competition from venues cropping up in other states, has saturated the market.

Excluding the racinos, statewide casino revenue was at a five-year low of $2.4 billion in 2009.

“We were very careful that we were not giving out licenses to people who were so actively competing with each other that they wouldn’t be successful,” Klineman said.

The S&P’s Bubeck said that, since the beginning of 2008, about two dozen of the roughly 70 gambling-sector companies the agency rated have defaulted as the weak economy cut into consumers’ discretionary spending. He is not projecting much of an uptick until at least 2012.
The challenges are especially acute for Indiana’s racinos, he said, because they’re not allowed to offer table games. In addition, he said, the stiff licensing fee limited their ability to build lavish facilities on par with those in places such as Las Vegas.

Expensive solutions

Under the current tax setup, both Indiana Live and Hoosier Park pay a 15-percent tax to the horse racing industry, plus another 4 percent in other taxes.

They also are taxed starting at 25 percent of the first $100 million they bring in. That tax increases to 30 percent for revenue between $100 million and $200 million and 35 percent of revenue in excess of $200 million.

That overall revenue tax includes the 19 percent in other taxes they pay, which means they are essentially being double-taxed on a share of their revenue.
Doug Brown, an Indianapolis attorney who lobbies for Indiana Live, projects that will cost both casinos $12 million this year.

“It puts racinos at an unfair competitive disadvantage and in an untenable financial position,” Brown said. “It’s an unfair situation that should be corrected.”

Some lawmakers agree, but are hesitant to concede that taxes and licensing fees are at the heart of the businesses’ financial troubles.

Sen. Luke Kenley, R-Noblesville, who oversaw much of the racino debate, said the underlying problem is that Indiana Live borrowed with abandon instead of raising more equity to fund its expansion.

Kenley, who sits on an interim study committee on gambling, said he agrees double-taxation for racinos needs to be eliminated. But he said this would be a tough time to make the change.

A report issued by the Indiana Fiscal Policy Institute last month showed dwindling tax revenue will cause a projected $1.3 billion budget gap as the state enters its next budget cycle.

Mangano said in addition to correcting the double-tax, he would like the Legislature to allow table games at Indiana Live.

Rep. Terry Goodin, D-Austin, one of two leaders on the interim study committee, said that is among the options the committee is exploring. Another possibility is taking the double-tax away in phases.

The committee is expected to issue a report Nov. 1.• 

http://www.ibj.com/articles/22866-indiana-live-swamped-by-debt-faces-potential-default

Ignoring declining revenues, gambling market saturation and Mohegan Sun's defaults, defies reality, but this is about fairy tales.
 

Trying to replicate Mohegan’s success in Revere

By Mark Arsenault

| Globe Staff December 22, 2013

UNCASVILLE, Conn. — Beneath the shimmering 34-story hotel tower, past Michael Jordan’s steakhouse, the Tiffany jeweler, and the beckoning slot machines that churn dollars by the millions, the chief executive of Mohegan Sun is at work in what ought to be a closet.

The drab space may be the worst executive office in the gambling industry.

“There’s no reason to waste a lot of money or good space on offices,” says Mitchell Etess, CEO of the Mohegan Tribal Gaming Authority. “Offices are for working. I try to make it homey.” He has personalized the room with family photos, a Slinky, and an “easy button” from Staples.

From this office, Etess is overseeing Mohegan’s Revere casino bid, an eleventh-hour entrant into the competitive Boston-area casino license sweepstakes. He faces a year-end deadline to complete a colossal task: submit plans to replicate in Revere the experience of visiting Mohegan Sun, a place that cannot be replicated.

Related

• Coverage: Casinos in Mass.

 

Jonathan Wiggs/Globe Staff

Mohegan Sun is working to create a casino proposal for Revere that is smaller in scale but replicates the success of its $2 billion gambling, dining, and shopping resort in Uncasville, Conn. It must submit its plan to the state by Dec. 31.
 

“Nobody anywhere in America will ever build anything like this ever again,” said Etess, referring to the roughly $2 billion gambling, dining, and shopping palace the Mohegan tribe opened in 1996, and subsequently expanded. The opening was just 17 years ago, but it was an altogether different time for the industry, when the Mohegans and the Mashantucket Pequots, 10 miles to the east at Foxwoods Resort Casino, enjoyed a vast regional monopoly on Las Vegas-style gambling. Creeping competition has since chopped up the market, reducing possible returns and ending the era of the stand-alone megaresort.

‘Nobody anywhere in America will ever build anything like this ever again.’

Mitchell Etess, Mohegan Sun CEO

“What we’ve been focusing on,” said Etess, “is how do we replicate on a lesser scale the concept here at other places?”

The concept of the original Mohegan Sun, at least physically, begins with the distinctive asymmetrical architecture on the outside, and the tribal chic aesthetics on the inside. Symbols of nature and the Mohegan tribe are everywhere. Turtle designs in the carpets. Wolves animated by robotics. Birds and bears rendered in simple silhouette outlines, like a detective would draw around victims of foul play.

The construction materials include lots of rough wood and stone; even the scattered hallway furniture is fashioned from shaved timber.

It is as if someone borrowed the blueprints for an enormous Las Vegas theme hotel and built it almost entirely from things they could find in the woods.

Of course, the tribe has also included some over-the-top attractions, like the five-story indoor waterfall that provides a roaring white-noise soundtrack to a $1 million Dale Chihuly glass sculpture.

The 25-foot tower of tangled hand-blown tubes looks like the most fragile object ever assembled, and the reason mom said to never play ball indoors.

The casino’s holiday gingerbread house is made of real gingerbread, and is as big as a real house. Or at least a beach cottage. Cavernous rooms hold nearly 6,000 slot machines and 350 table games. The games are always open. The casino never closes. The doors have no locks.

Jonathan Wiggs/Globe Staff

Mohegan Sun CEO Mitchell Etess, shown in his office.

Mohegan Sun claims to gross more gambling revenue than any other facility in the Western Hemisphere, which means visitors lose more here than anywhere else.

The design themes of a Revere development are more likely to draw on local attractions, such as Revere Beach. “The beach and the history of the beach is super important, so I wouldn’t be shocked if you see themes of that throughout the facility,” said Etess.

The tribe’s hastily planned Revere bid is not the first time it has branched out in commercial casino development. In 2005, Mohegan Sun bought a horse track in Wilkes-Barre, Pa., and expanded it into a casino, Mohegan Sun at Pocono Downs. It is a successful scaled-down version of the flagship property, with about 2,300 slot machines and 80 table games. Mohegan also manages Resorts Casino Hotel in Atlantic City. The tribe is a partner in a pending bid for a casino license in Philadelphia, and has a deal to develop a gambling resort with the Cowlitz Indian tribe in Washington, a proposal that has been tied up in court challenges.

Etess, 55, has worked at Mohegan Sun since a year before it opened. The upstate New York native grew up in the hotel business — his family owned Grossinger’s, a well-known resort hotel in the Catskills. Top boxers liked to train there, including Rocky Marciano and Ken Norton.

“My first job — I was in charge of the kiddie pool and the animal farm,” Etess said. “I was 13. I had to make sure the animals were fed. I actually did lose two rabbits.” He later worked at the hotel golf course, the front desk, and then “anywhere that needed to be worked,” he said. “They would say, ‘Oops, sorry, so-and-so from transportation quit. You have to run the transportation department.’

And every summer I worked as night manager. I had a real solid foundation in the hospitality business.”

The Revere casino bid is the tribe’s second try for a Massachusetts license, following its Nov. 5 referendum loss in Palmer. That same day, across the state, a Suffolk Downs casino proposal scored a split decision: winning a vote in Revere but losing in East Boston. After the loss, Suffolk Downs officials reached out to Mohegan Sun, Etess said, with a plan to develop a casino solely on the Revere side of the city line that passes through the track’s 163-acre property.

“Putting a deal like that together in a compressed time frame was very challenging and difficult,” Etess said. Much of the negotiations were done on conference call, sometimes with a dozen or more people on the line, including a bunch of lawyers. “It’s something you could have taken six months to do. It was done in six days.”

The two sides announced Nov. 27 that Mohegan Sun would seek to build and own a casino on land leased from Suffolk Downs.

The announcement raised complaints in Palmer, where casino supporters have accused Mohegan Sun of running a lackluster campaign, suggesting the tribe was already coveting the more lucrative license in Greater Boston.

Etess denies Mohegan Sun had wandering eyes before the vote.

“This talk from people in Palmer that we weren’t really trying or didn’t really care is particularly hurtful because we had invested so much into it,” he said. “We were shocked at the outcome.”

The state gambling commission is treating Mohegan’s Revere development as a new project, not as a revision of the old Suffolk Downs plan. The commission on Thursday waived one of its deadlines to permit a new referendum vote in Revere, expected in February. Proponents are confident they will win. They were also confident before the first proposal got clobbered in East Boston.

To move to a vote, Mohegan Sun must sign an agreement with Revere officials. Talks have been ongoing, but no deal has been announced.

Mohegan Sun must submit plans and supporting documents for its application by Dec. 31, the same deadline faced by rival applicant Wynn Resorts, which seeks to open a resort casino in Everett.

“It’s basically a full-court press to get everything done that we had a year to do in Palmer,” said Etess.

The tribe’s designers are drawing plans for a $1 billion gambling resort on about 40 acres of land belonging to Suffolk Downs. Details are in flux, but the early thinking calls for about 4,000 slot machines, 100 table games, and a 20-table poker room, Etess said.

He envisions a retail and entertainment “spine” running through the property, a center bar in the gambling area and a Mohegan Sun hotel of about 300 rooms — a quarter as big as the 1,200-room hotel at the flagship property in Connecticut. The Revere project would probably include a second hotel of 150 to 200 rooms, to be built by another hotelier who has not yet been named, he said.

There will be several major differences from the old Suffolk Downs casino plan. The original project, planned for the East Boston side of the city line, would have required racing to continue at the last thoroughbred track in New England. The new plan has no such guarantee, though track owners say they intend to keep racing. New plans will also move the casino’s planned main entrance north on Route 1A into Revere, Etess said.

No new development can match the original Mohegan Sun, but Etess promised the tribe would build, in Revere, something worth traveling to see. “We want to be another big draw for the Boston area,” he said. “Like Old Ironsides, Faneuil Hall — Mohegan Sun.”



 

Milford doesn't NEED Foxwoods!

With declining revenues, FOXWOODS is desperate!

They defaulted on their debts, screwed the little guy and now they need Massachusetts to suck revenues from the local economy!

Casino-Free Milford

"Scott Butera is nothing but blunt when it comes to explaining what casino operators want from their customers - 'their wallet and their spend.' "

He's also candid about a population of customers he can do without, like those "stereotypical bus loads of senior citizens who show up with walkers and oxygen tanks....those darn elders don't gamble away enough of their money to help Foxwoods reach it's goal." -Boston Globe by Joan Vennochi, May 24, 2012

Let's show Foxwoods another population they can do without....MILFORD!!!...

Senior citizens boycott Foxwoods Casino


A group of senior citizens says they won't be going to Foxwoods Casino any time soon because of something one of the casino's officials said. They want other seniors to boycott trips to Foxwoods as well.

Foxwoods NEEDS Milford! Milford Doesn't NEED Foxwoods!

 

 

Casino-Free Milford

Foxwoods would have us believe that the destination resort casino they will build in Milford will be a "grand New England-style resort." They claim it will consist of "low-rise buildings, with beautiful rooftops and magnificent porches, all of which integrate with their surroundings." Per Mr. Butera, CEO of Foxwoods, “I think the whole design is the ‘wow’ factor. This is elegant and beautiful and something that has all kinds of natural beauty.”

Grandiose plans for Milford? A trip to Foxwoods CT provided a glimpse of the future for this reader. As he puts it, "how can Foxwoods help Milford when they can’t help themselves?"

 

 

Scandone: Will this be Milford’s future?

 

Posted Oct 31, 2013

 

MILFORD —

During a ride to Foxwoods through the back roads of the surrounding communities, my wife and I came upon Norwich, which features the neighborhoods you hear so much about. As far as the eye can see are "hot bunking" multi-level apartment houses that city officials explain as a “phenomenon in which employees of the casino live in 8-hour shifts because their wages can’t support home purchasing or renting.”

Concerning is that sub-contractors are immune from the ICE Image Program. In a 2009 study prepared by the Spectrum Gaming Group for the Governor of Connecticut, “The casinos recruited non-English speaking workers.”

And, “Norwich spends millions each year to support students who speak a language other than English and have significantly lower math proficiency levels.” Milford knows too well how an underground population and work force of sub-contractors led to tragic deaths of Milford residents on local roads, created a huge problem with boarding houses that continues to put a financial burden on Milford schools.
                                                                                                                                         
The bus parking lot at Foxwoods looked like a vacant airport runway and the interior resembled a ghost town with vacant store fronts. A waiter said it is “horrendous" and “only when the old people get their Social Security checks and welfare people get their payments is it busy."

A bartender explained that Foxwoods keeps lessening the probability of winnings throughout the gambling machines and tables because, “they can’t afford larger payments.”

How can Foxwoods help Milford when they can’t help themselves?
                                                                                                                                                          
PETER SCANDONE
Milford

 

http://www.milforddailynews.com/opinions/letters_to_the_editor/x915438603/Scandone-Will-this-be-Milford-s-future

 

 

The Biggest Gamble at Indian Casinos: Tribe's Debt Obligations

Stop Graton Casino

Chukchansi Gold Resort & Casino missed half it's payment last month to the bank. Should we expect the same from Graton Casino?

The Biggest Gamble at Graton Casino: Tribe's Debt Obligations

October 24, 2013

0

The biggest bet involving Graton Casino won’t be made at a card table or slot machine. It’s with the project itself. At more than $800 million, Graton Casino is the costliest development project in Sonoma County history.

The tribe has borrowed heavily in order to foot the bill. But, what if the tribe misses expectations?

That’s been the case with other tribal casinos, which has quickly become an over-saturated market. If Graton Casino can’t attract enough gamblers from the Bay Area, it means the tribe will be in a debt predicament similar to the Chukchansi Casino.

Last month, the Chukchansi Gold Casino & Resort missed their interest payment by $6.25 million.
Vice-Chairwoman, Nancy Ayala and “her small faction of supporters have been seizing money for themselves,” according to tribal chairman, Reggie Lewis. A court order has been made to see where the money was spent and to ensure the remainder of the debt is paid, so the casino can remain open.



Should we expect a similar scandal if Graton Casino opens? Only time will tell to see who really reaps the benefit of this casino’s profit. .

The article below is from The Fresno Bee giving a brief story on the Chikchansi’s missed payment.

Chukchansi tribe misses half of casino payment

The Picayune Rancheria of the Chukchansi Indians was unable to make a full payment last month to the bank that restructured financing for the tribe’s Madera County casino, according to court documents released Friday.

The tribe’s financial predicament surfaced in a ruling by a New York judge who is requiring the two opposing factions, led by Nancy Ayala and Reggie Lewis, to give all their financial information to the trustee, Wells Fargo. Judge Melvin Schweitzer also wants a professional audit completed.

The Ayala group took control of the Coarsegold tribal business center and Chukchansi Gold Resort & Casino after a February referendum that the Lewis faction — which split from the Ayala group — contends was unconstitutional.

Schweitzer subsequently intervened and ruled that both sides need to sign off on payments.
In a hearing Wednesday, the judge said casino operators were obligated to make an interest payment of $12.49 million to the bondholders on Sept. 30, but paid only $6.25 million.

“We asked why they did not have sufficient money to make the interest payment,” said Richard Verri, lawyer for the Lewis group. “The Ayala group has been in control of the till; we want to know why the casino doesn’t have a plan for operating the business so it can pay its debts.”

The casino and Chukchansi Economic Development Authority, the agency in charge of the casino, “state that they have no existing plan for payment of the remaining interest,” court documents said.

But a spokesman for the Ayala group said it pledged to have the payment made by the end of the year.

“We continue to work with the bondholders in an effort to become current on bond payments across the fourth quarter of this year,” said spokesman David Leibowitz.
He said the bank was receptive to the Ayala group’s plan.

“They have been very receptive to this and we have every intention of paying our debts and making sure that the Chukchansi Gold Resort & Casino stays open,” he said.

Wells Fargo holds the $250.4 million note for casino investors. The bank sued because the Lewis group controlled a Rabobank account used to pay off the casino bonds, but the Ayala group refused to put money in that account and instead opened other accounts.

Schweitzer intervened and ruled that both sides need to sign off on payments that would go through Rabobank.

The tribe restructured $310 million in loans last year when it couldn’t make its payments. Under a new plan, the tribe agreed to extend its loan to 2020, allowing a longer-term payback for much of the remaining loan, but to pay a 9.75% interest rate. The previous interest rate was 8%.

Click here to read the full article.

Niagara's Addiction to Gambling Revenues

Just as in Massachusetts, in desperation, Niagara Falls' leaders failed to consider the community destruction caused by Predatory Gambling ----

June 4, 2013

State audit raises concerns over Niagara Falls' budget practices

By Mark Scheer and Justin Sondel

Niagara Gazette

The Niagara GazetteTue Jun 04, 2013, 11:27 PM EDT

Niagara Gazette — An audit released Tuesday by the New York State Comptroller's Office raises serious concerns about the city's finances, including a "pattern of structural deficits" due to a lack of incoming casino revenue and budgetary decisions made by city officials in recent years.

The audit suggests matters were "worsened significantly" as a result of the continued inclusion of unrealized casino revenues in annual budgets and a reliance on what auditors described as revenue "one-shots" drawn from fund balance and surplus capital project funds.

“Niagara Falls has nearly exhausted its resources to avoid a fiscal crisis," state Comptroller Thomas DiNapoli said in a statement accompanying the audit. "City officials cannot continue to walk a financial tightrope for much longer."

The audit describes the lack of incoming casino revenue since 2008 as one of the reasons recurring revenues have not been sufficient to fund recurring expenditures. The situation, according to auditors, resulted in a general fund annual budget gap averaging $12.4 million during the audit period from Jan. 1, 2009 through Jan. 9. The audit indicates that city officials balanced budgets using fund balance and an estimate for casino revenue averaging $5.3 million annually.

"While the dispute over gaming revenue is significant, the city’s budget challenges also stem from a number of socio-economic factors including population loss and a high unemployment rate," DiNapoli said. "The mayor and the city council are actively trying to manage their considerable hurdles, but getting on firmer financial footing will require a resolution of casino gaming issues and likely even greater assistance from the state."

The audit suggests Dyster's administration should have removed casino revenues from annual budgets during the casino cash dispute to better protect the city's overall financial position. Auditors also said the city should have developed more formalized multi-year plans for eliminating accumulated deficits.

"The city has funded these structural deficits by relying on "one-shots" such as fund balance and surplus moneys remaining in the capital project fund," the audit reads. "This approach has negatively affected the general fund's financial condition. The controller indicated that the general fund ended the 2012 fiscal year with an unassigned fund balance deficit of approximately $5.2 million.

Therefore, over this four-year period, fund balance decreased by about $21.6 million."
Auditors concluded that while it "might have been prudent" for the city to account for incoming casino revenues when the gaming revenue squabble started in 2009, as the dispute "dragged on without resolution," it should have removed those revenues from its financial plans. Instead, as of Dec. 31, 2012, the audit notes that the city incurred, in the aggregate, $23.4 million in expenditures intended to have been funded with casino money, that it has not received.

Dyster declined comment when reached by telephone Tuesday morning prior to the audit's formal release, saying he could not discuss what was at the time considered a "draft" report.
In a letter of response attached to the final audit, Dyster's administration indicated that it budgeted casino revenues to "support" the state's long-held position on the dispute itself.

"This situation is virtually unprecedented in the history of New York state, and almost beyond the control of the city of Niagara Falls," Dyster wrote. "The city has been forced to choose among largely bad options with little guidance as to what constitutes best practice under often unique circumstances. Given the state's degree of involvement and responsibility in this matter, we find it somewhat ironic that an agency of the state of New York would now find itself in a position to critique our attempts to deal with a crisis in which the state itself has been a central actor."

In their report, auditors noted that although the city's fund balance had been depleted, it continued to budget for what they described as "one-shot revenues," including in the 2013 budget which relied upon $2 million in unavailable appropriated fund balance, $2.9 million in transfers from the capital projects fund, $850,000 in debt service fund transfers and $1 million in property sale revenues. As a result, auditors concluded that the city's 2013 adopted general fund budget has a structural deficit of $12 million.

"Therefore, if the city does not receive any or an insufficient amount of casino revenue in 2013, it will have a revenue shortfall of approximately $7.2 million, representing the budgeted casino revenues and the unavailable appropriated fund balance," the audit reads. "Moreover, even with a resolution of the casino revenue impasse that would positively impact the city, the council and mayor will still need to take action to address the structural budget deficits affecting the city."
In its letter of response, the Dyster administration takes exception to auditors' reference to "one-shot" revenues.

"The report goes on to take issue with the city funding certain structural deficits by relaying on 'one-shots,'" Dyster wrote. "The city's strategy should not be characterized in this way. Large fund balance surpluses remaining on capital projects, as well as from the general fund, have been used time and again (year after year) in order to close deficits. Had the city not used those surpluses, they would have sat on the books and accomplished no purpose."

DiNapoli's office also suggested the city should have been more diligent in closing out completed capital projects and ensuring that all unexpended funds are transfered to the debt service fund and used only for "payments on all related debt." While the report notes that a "substantial amount" of unassigned fund balance in the capital projects fund was accounted for by Controller Maria Brown's office, it estimates that additional funds - ranging from $1 million to $1.4 million - may remain in other projects that could be returned to the general fund.

Reached by telephone on Tuesday, Brown said her office is not in a position to closely monitor all capital projects, including such things as road repair or construction jobs. She suggested the work was more in keeping with the duties of the city engineer, a position that has been in flux at various points under the Dyster administration.

"I repeatedly asked for a list of closed projects from engineering to no avail," she said. "I send reports on a continuous basis to the mayor and the city administrator informing them on the status and funds for projects and encouraging them to find out when, and if, projects closed," she said.
Brown said the city has maintained multi-year plans for various accounts in recent years and that, although not required to, the city was asked by state auditors to maintain those plans in a different form recommended by the state.

Brown noted that auditors took a look at "thousands and thousands" of transactions as part of a six-month review and did not identify anything improper.

"Everything was in order," she said. "Everything required of my office was in place."
The draft audit predicts "significant cash flow shortfalls" for the city in 2013 and a need for the city to issue short-term debt to address cash flow problems late in 2013. It also notes that the city's credit rating has been downgraded several times in recent months and may be reduced further in the future, possibly preventing the city from being able to issue debt or to do so at a reasonable cost.

"The biggest thing is the lack of casino funds and I don't want people to lose sight of that," Brown said. "It all boils down to the lack of casino funds that put us in the situation we are in."

FALLS AUDIT DiNapoli's office recommended that the city take the following corrective actions in the release; • Establish policies and procedures for access controls to restrict financial software permissions to only those functions that are necessary for employees' job duties • Designate someone independent of the city controller's office as the city's financial system administrator • Ensure that logs for the financial system are maintained and periodically reviewed • Establish policies and procedures for data backup and storage, and comprehensive guidelines for disaster recovery

http://niagara-gazette.com/local/x1465637714/Audit-takes-Falls-to-task-State-audit-raises-concerns-over-Niagara-Falls-budget-practices

 

Foxwoods Salivating

Because of declining revenues and gambling market saturation, Foxwoods MUST expand and destroy communities elsewhere, currently eyeing Milford, MA and now New York.

Foxwoods eyes site in Liberty

Planned casino would be next to Grossinger's

 

By Victor Whitman

Times Herald-Record

Published: 2:00 AM - 06/02/13

 

LIBERTY — Connecticut's Foxwoods Resort Casino plans to make a play to build a casino next to the former Grossinger's hotel in Liberty.

 

The operator of the largest casino complex in North America is close to inking a deal on a venture with landowner Muss Development Corp., company executives say.

 

The Muss family, Manhattan real estate developers, owns 500 acres next to the 18-hole golf course and long-closed hotel. Should a widely anticipated state referendum on casino gambling pass in November, the Foxwoods-Muss group would vie for one of potentially seven licenses expected to be available statewide if the referendum OKs casino gambling.

 

"We are extremely interested in developing a destination resort casino in the Catskills and the 500-acre Muss site at Grossinger's is perfectly situated to accomplish that goal," said Scott Butera, Foxwoods Resort and Casino president and chief operating officer.

 

"We believe that having more than one resort casino in the Catskills will help drive the governor's vision of promoting a world-class tourist destination. Over the last several weeks, we have been working with Muss to develop a plan to move forward. Together, we look forward to continuing our discussions with local and state elected officials, " Butera said.

 

Muss' chief operating officer, Jeff Kay, said Foxwoods' "proven track record" will help make their bid competitive in what could become a crowded field of suitors for a gambling license. The Muss family favors having more than one casino sited in the Catskills.

 

"We think Sullivan County could support more than one," Kay said.

 

Muss Development owns 50 acres near the ninth hole of the golf course, where the family once built some model homes for an aborted housing development. The other 450 acres is around the lake. The Muss family has owned the property since the 1980s. A company controlled by Westchester developer Louis Cappelli owns the former hotel site.

 

Kay said the 50-acre site would be a good location for the hotel and casino but the plan is open at this early stage.

 

Foxwoods, which operates a complex of six casinos on the Mashantucket Pequot Indian Reservation in Ledyard, Conn., struggled through the recession with falling revenue and significant debt.

 

Foxwoods is also pursuing a license to build a $1 billion resort off I-495 in Milford, Mass., near Boston.

 

Butera said the company has completed a major restructuring. "That is all behind us." He said Foxwoods would pursue the Catskills project, even if it is selected for a license in Massachusetts.

 

"We think the site is a terrific site," Butera said. "The old Grossinger's site is prime for development."

Liberty Supervisor Charlie Barbuti said he's pleased with the renewed interest in Grossinger's.

 

"I don't know how it is going to play out," Barbuti said. "They seem like the real deal."

 

http://www.recordonline.com/apps/pbcs.dll/article?AID=/20130602/NEWS/306020312

 

 

Vultures Picking At The Carrion

From: Springfield: MGM bests Penn … for now

By David McKee ~ May 1st, 2013

 

Yes, the comedy is finished in Springfield, at least for the moment. In an episode worthy of The Simpsons and after an epic amount of foot-dragging, Springfield Mayor Domenic Sarno was cajoled and ultimately browbeaten into actually taking a stand on which gambling company will get the city’s nod to build a resort downtown. And the winner is … MGM Resorts International. (Not such a big surprise, considering the ritzier MGM brand, the historically sensitive design and its willingness to spend heavily.)

 

 

And an amusing footnote:

 

Given the Mashpee pie-in-the-sky attitude, the state is well advised to look elsewhere … th0ugh maybe not to Milford, just up the road from Mashpee Casino HQ in Taunton. That’s where insolvent Foxwoods Resort Casino (“What is this ‘default’ of which you speak?”) has the nerve to pitch a casino project. Foxwoods CEO Scott “Woody” Butera is in cahoots with another all-hat, no-cattle casino developer, David Nunes (left), so this really is the clown car in the parade. Local selectmen were more concerned about sewage disposal than another, equally vexing question: Where in Hell do Nunes and Butera think they can get $1 billion in backing? Worse still (if that were possible) front man Nunes has gone to ground. If there’s a front-runner for the coastal region of Massachusetts, it’s a Player To Be Named Later.

 

http://dmckee.lvablog.com/?p=10714 

 

 

 

Included in the comments:

 

You are dead-on about our Alfalfa look-a-like idiot mayor. He is so transparent that, two days after the announcement, he has the local Chamber of Commerce clamoring for a $40,000 per year raise in the mayor’s salary.

The word here in town is the FBI has been sniffing around, asking a lot of pointed questions about Sarno and his cronies … stay tuned.


Any suggestion or whiff of corruption surprises WHO?

Palmer: KoolAid Consumption?

Behind closed doors?

Just totally ignore the Citizens' Impact Study that told Palmer the ANNUAL cost to host Mohegan Sun would be $18 MILLION  to $39 MILLION not including ~ $50 MILLION to bring water from the Quabbin.

Where will the LOW WAGE WORKERS live? When Mohegan Sun is unable to find enough Massachusetts residents to work for a pittance and they recruit workers from overseas as they did in Connecticut, how will Palmer pay the cost?  

Mohegan Sun Massachusetts officials say host community agreement with Palmer should be inked by July

By Conor Berry, The RepublicanThe Republica
on April 23, 2013

 

PALMER — Mohegan Sun Massachusetts officials announced Tuesday that they expect to sign a host community agreement with Palmer officials by July, and hold a town-wide referendum on the estimated $775 million casino plan by September.

Palmer Town Manager Charles T. Blanchard said that's the timetable officials have been aiming for throughout the ongoing negotiations. "We still have an awful lot of work to do in terms of the details," he said.

Paul E. Burns, an at-large member of the Palmer Town Council, is among the biggest local boosters of the plan, which he believes will bring jobs and growth to western and central parts of the Bay State. "Mohegan Sun's announcement that they are seeking to complete a host community agreement in time for a September referendum is welcome news," he said. "This announcement clearly positions Mohegan Sun and the Palmer project back in the forefront of the race for the sole Western Mass casino license."

Mohegan Sun Massachusetts is planning a "world class destination casino resort" off Route 32 that company officials claim will bring thousands of jobs to the region. The host community agreement, a component of the Massachusetts casino gaming legislation, establishes terms and plans for community mitigation and is required as part of Phase Two applications to the Massachusetts Gaming Commission – the panel charged with awarding one state casino license for this region.
Up to two other casinos can be built elsewhere in the Bay State, according to state officials.
After the host agreement deal is inked, Mohegan officials must request a formal vote on the proposal.

At that point, town officials must approve a date for the referendum. "The Palmer Town Council must set a date for the election that they feel is reasonable for both the applicant and the residents of Palmer, so they have an opportunity to become fully familiar with the issues in order to determine how they want to vote on the referendum," Blanchard said.

The vote must be held no sooner than 60 days after an agreement is reached, and no longer than 90 days.

"Palmer has been welcoming, supportive and motivated throughout this process," said Mitchell Etess, chief executive of the Mohegan Tribal Gaming Authority. "The host community agreement is important to establishing an effective and cooperative working relationship with the town, and a milestone that will enable us to move forward with a referendum vote."

Etess said casino officials are "sensitive to the fact that Palmer needs to know how the creation of this world-class destination will impact life in town." Completing the host agreement "will go a long way to help communicate the key plans in that regard," he said.

The plans for Mohegan Sun Massachusetts call for a resort casino hotel with "retail, lifestyle and other amenities," company officials have said. Mohegan's proposal includes the "strongest financial platform" of any other casino proposal for Western Massachusetts, according to Etess. Mohegan has formed a financial partnership with Brigade Capital Management, a $12 billion, New York City-based, SEC-registered investment adviser.

Currently, Mohegan Sun spends nearly $500 million annually on "goods and services from local vendors near its Connecticut and Pennsylvania facilities," company officials said in a media release.

It also recently launched a new "Working at and Working with Mohegan Sun" series to provide information on potential career and vendor opportunities in the resort gaming industry.

In Springfield, MGM Resorts International and Penn National Gaming are planning casinos in the South End and the North End, respectively. As part of its plan, Penn National has an option to buy properties from The Republican and Peter Pan Bus Lines.

Hard Rock International also is proposing a casino resort on the grounds of the Eastern States Exposition in West Springfield.

http://www.masslive.com/news/index.ssf/2013/04/mohegan_sun_massachusetts_offi.html

 

Foxwoods? Milford?

$1 Billion casino?

 

Foxwoods' fortunes tied to $1 billion Massachusetts casino bid
By Brian HallenbeckPublication: The Day

Published 04/14/2013

 

Bay State town hasn't rolled out the welcome mat

Mashantucket - Nearing the end of a massive debt-restructuring and having completed a mostly voluntary downsizing of its workforce, Foxwoods Resort Casino finds itself at a crossroads.
As in Crossroads Massachusetts, a $1 billion casino project that may or may not fly with the locals in Milford, an eastern Bay State town that a would-be casino developer has been courting for years and with whom Foxwoods is now partnered.
At a meeting last Monday in Milford, members of the town's Board of Selectmen panned as short on specifics a presentation by FCX Massachusetts LLC, the entity Scott Butera, Foxwoods' president and chief executive officer, has formed to carry the proposal forward.
Earlier, an anti-casino citizens' group picketed outside town hall, the site of the meeting.
FCX has picked up a baton seemingly dropped by Crossroads Massachusetts LLC, a partnership among Colorado-based developer David Nunes, who first proposed a Milford casino in 2008, Warner Gaming of Las Vegas, businessman Robert Potamkin and others.
Crossroads is an investor in FCX, according to Butera, who was seemingly unfazed by the chilly reception in Milford.
"It was what we expected," he said in an interview late last week. "They're anxious to get more details. If I were in their shoes, I would feel the same way."
Butera noted Foxwoods had only joined the project a month earlier.
"Unfortunately," he said, "not a lot of work had been done."
Can Butera and his team win over selectmen when they return to Milford in six weeks? Can they gain the endorsement of Milford voters in a binding referendum, should the process get that far?
Even if it clears those hurdles, Foxwoods could face competition for a casino license from Wynn Resorts and Caesars Entertainment, Las Vegas-based giants proposing casinos in Everett and in partnership with Suffolk Downs in East Boston, respectively.
That Foxwoods is even in the running seems a stretch to some.
"When we heard Foxwoods was getting in on this deal, it was quite a shock," said Mary Johnson, president of Local 2121 of the United Auto Workers, the labor union representing Foxwoods table-games dealers.
During protracted contract negotiations, casino management has cried poverty, balking at the union's demands for wage increases, shared health insurance costs and other benefits, Johnson said, causing the union to question Foxwoods' investment in Massachusetts.
Johnson was among a Local 2121 contingent that attended the Milford meeting.
"We don't have a position for or against the casino project," she said. "We were there strictly for informational reasons."
Two days before the meeting, Foxwoods completed what Butera had previously referred to as a "reorganization plan," paring its workforce through early retirement offers and layoffs. Management sought to eliminate 50 dealers' positions and ended up letting about 68 dealers go, all voluntarily, according to Johnson.
Foxwoods did not provide information on the total number of positions eliminated.
"Reorganization is a pretty dramatic word," Butera said. "We cleaned some things up, created some efficiencies. Most people who left did so on a voluntary basis. Employment levels aren't dramatically different than they were before."
He told Milford selectmen that Foxwoods employs more than 8,000 people, making it one of the largest sources of jobs in the casino industry.
Despite the downsizing and the ongoing decline in Foxwoods' slot-machine revenues — year-over-year totals have been down 14 straight months and in 23 of the last 26 months - management has no plans to close any portion of the property, which includes MGM Grand at Foxwoods, according to Butera.
"Some stores might close while they're being renovated, but that's all," he said.
Debt rated again
During his Milford presentation, Butera said Foxwoods' owners, the Mashantucket Pequot Tribe, expected to close within two to three weeks on a debt restructuring that will put Foxwoods on sound financial footing. The tribe has struggled since at least 2009, when the recession, gaming competition and overspending on MGM Grand caused it to default.
The tribe halted regular distributions of gaming revenue to tribal members at the end of 2010 and ended lesser "transitional" payments last year.
"Our financial problems are well behind us," Butera told selectmen.
Two days later, the tribe announced it was extending for a third time the expiration date on bond-exchange offers that are part of the restructuring plan designed to shrink a debt load of about $2.2 billion to about $1.7 billion.
The tribe still lacks sufficient participation among holders of a class of notes paying 8.5 percent interest.
The tribe announced that the National Indian Gaming Commission has favorably reviewed the exchange offers.
For the first time since the tribe's default more than three years ago, credit-rating agencies have assigned preliminary ratings to the tribe's senior debt, which, under the restructuring plan, will total $587 million in bank loans. Both Moody's Investor's Service and Standard & Poor's have deemed the tribe's financial outlook "stable."
Moody's assigned a B1 rating to the tribe's proposed $587 million "credit facility" along with a Caa1 corporate family rating and a Caa-1 probability-of-default rating. Debt with a B1 rating is regarded as highly speculative while that with a Caa-1 rating, which is lower than B1, also carries substantial risk, according to Moody's.
Standard & Poor's assigned the tribe a CCC+ preliminary issuer credit rating, the same preliminary issue-level rating it gave the tribe's credit facility. Debt that carries the rating is considered substantially risky.
“The stable rating outlook reflects our belief that cash flow and excess cash on the balance sheet should be sufficient to fund fixed charges over the near term," S&P's said in a March 28 announcement.
Butera said the ratings are an important step in restoring faith in the tribe's finances among investors. He said that in connection with the restructuring plan, the tribe intends to publicly release more information about its finances than it has previously.
"There's a significant advantage to transparency," he said. "Investors are a lot more comfortable investing in a company that shares information. It opens you up to a broader investment community. … It's a disadvantage if all you can publish is your slot handle."
In announcing its ratings on the Mashantuckets' debt, Standard & Poor's said it considered the tribe's business risk profile "vulnerable," reflecting the tribe's "reliance on a single property for cash flow and competitive dynamics in the region."
"In addition, the business risk profile takes into account our expectation for a substantial increase in competition located in Massachusetts in early 2016, which we expect will result in a meaningful decline in the customer base and cash flow generation," Standard & Poor's said.
Perhaps it's little wonder, then, that Butera insists his "No. 1 focus" is Crossroads Massachusetts.

http://www.theday.com/article/20130414/BIZ02/304149929/-1/BIZ