Thursday, October 7, 2010

Casino Tribes Defauting On Debts With Little Consequence

Banks must learn tribal law before they give their money to casino tribes.  How can they collect if a tribe doesn't pay?   They can't go on the reservation to get slot machines.    Lots of promises unfulfilled.  Remember when we were promised expanded gaming would balance our budget here in CA?

Last November, the Mashantucket Pequot Tribal Nation in Connecticut failed to make $7 million of a scheduled $21.25 million payment on a $500 million debt. The collateral on the deal was their Foxwoods Resort Casino. If they had been a normal business owner, they would have gone into a default, and creditors could have gone after the casino.

But the Mashantuckets aren’t a normal business owner. They’re an Indian tribe, with the rights of a sovereign nation. Legally, the creditors couldn’t take the property or force the tribe to pay. Standard & Poor’s lowered the tribe’s credit rating to D, and Moody’s followed. But with the casino pulling in $700 million in profits a year, even during the downturn, it’s not like they had an immediate need to borrow more money.

In fact, Michael Thomas, the tribe’s council chairman at the time, acknowledged the tribe had the money to pay. But with 2009 marking the first time Indian casino profits dropped from the previous year, making the payment would have meant that tribal members would have gotten smaller payments — something he refused to do, even though some tribal members were getting $120,000 a year in payments.

Read the rest of the article  HERE


stand your ground said...

Quite a few tribes have been doing this, but as long as they do business under "Tribal Sovereignty"
the banks will just have to put up with this....OH WELL...
I guess $120.000 is not enough for these people, sounds familiar,much like Pechanga.

Anonymous said...

It's what happens when people think that allowing gambling was going to solve all problems, both with the tribes and with local governments.

Anonymous said...

Quit supporting tribal businesses that don't deserve it.

Go to San Manuel.

Anonymous said...

Not all tribes are bad, but Pechanga certainly is.