Saturday, December 29, 2007
Kevin De Sanctis, who oversaw all pre-opening operational matters for the Mohegan Sun casino while working for Sun International, will open the next casino in Atlantic City.
“Revel” is scheduled to open on the northern tip of the boardwalk during the same season that Mohegan Sun’s next hotel is due to open - almost three years away. De Sanctis is now Revel's president and chief operating officer. The mega-casino is the first in a wave of development expected to take place in Atlantic City over the next five years and is expected to cost $2 billion. The project will include 3,800 hotel rooms and 150,000 square feet of gaming space. Revel is due to be the first casino in Atlantic City to open since the Borgata in 2003.
De Sanctis left Sun International to work for Penn National in February 2001 and was Penn’s president and chief operating officer when they sold their Pocono Downs racetrack to the Mohegan Tribe for about $280 million in January 2005.
Revel’s 20-acre site is “one of the largest, most uniform and contiguous properties in Atlantic City,” according to the company. Goldman Sachs is a partner in the Revel Entertainment development and purchased the prime Atlantic City property late last year for $74 million.
Pinnacle Entertainment, a competitor of the Mohegans in the bidding for a Kansas City casino, is scheduled to open a new Atlantic City casino in 2012. Pinnacle bought the 18-acre Sands Casino Hotel with adjacent beachfront property for $250 million last year from financier Carl Icahn.
The largest of the planned Atlantic City developments is MGM Mirgage's $5 billion mega-casino in the marina district that is scheduled to open five years from now. The MGM project would be the largest investment in Atlantic City's casino history.
Including a fourth development planned by a private investor group led by former Caesars Entertainment Inc. chief executive Wallace R. Barr, all of the new projects will total about $9 billion.
Friday, December 28, 2007
Wednesday, December 26, 2007
The National Labor Relations Board will hold a hearing on January 15th in Hartford to address the Mashantucket Pequot's complaints that the November union vote held at Foxwoods Resort Casino should be invalidated because of improper election conduct on the part of the United Auto Workers union.
The NLRB has already dismissed a Mashantucket complaint that was based on its tribal sovereignty.
Friday, December 21, 2007
The cost of the Tribe’s two expansions, one at the Mohegan Sun and the other at the Tribe’s Pocono Downs in Pennsylvania, will run 25% over the the budgeted amounts announced just one year ago.
The Tribe made the announcement last week during a conference call with financial analysts in which the Tribe’s gaming authority also reported upon their fiscal year’s fourth quarter gaming results.
The New Price
The cost of the current expansion project at the Mohegan Sun casino on the reservation, called Project Horizon, is projected to increase by $185 million to $925 million. The Tribe announced last November that the expansion would cost $740 million and include a 1,000-room hotel and 900 slot machines, among other amenities. Although the new cost will be significantly higher, the hotel will now have only 922 rooms and the gaming space will include 826 slot machines.
The Tribe began the three-year Project Horizon six months ago in a groundbreaking that took place on June 7th.
The expansion in Pennsylvania, called Project Sunrise, will also exceed its earlier budget estimate by 25% before it is completed. Earlier estimates of the Phase II construction were between $140 and $150 million but that will increase to $208 million, according to Bob Soper, CEO of Pocono Downs.
The Pocono's Project Sunrise began last May 4th, according to officials.
Rising prices of raw materials and a faulty estimate were cited for last year’s incorrect Mohegan Sun budget figures.
Former chairman of the tribal council Roland Harris stepped down from the tribal council last year to assume the post of MTGA's senior vice president in charge of construction and special projects. Harris abruptly stepped down from his post two weeks ago - a job that paid him a salary of around a half-million dollars annualy (Harris was paid $306,286 from March 2007 through September 2007). The Tribe has said they will seek someone with qualifications this time.
Deja Vu - The Last Expansion
The budget overruns are reminiscent of the last expansion on the reservation. The expansion at Mohegan Sun that first opened in 2001, called Project Sunburst, exceeded its original estimate by about 50%. The final cost was about $1.2 billion compared to the $800 million originally projected for the expansion. In that expansion, the number of hotel rooms was also reduced, from 1,500 to 1,200 rooms.
Expansion at any price? The $1.2 billion cost of Project Sunburst does not include the approximately $1 billion the Tribe is paying its former casino management company, Trading Cove Associates, which ended the management contract early and paved the way for an expansion controlled entirely by the tribal council under then-chairman Roland Harris.
“I’ll hide the cheese where the rats will never find it”
According to Tom Acevedo, the Mohegan government’s former chief-of-staff and former NIGC official, in an internal investigatory witness statement taken in 2001, “(I) had a conversation with Len Wolman, (a partner in) Trading Cove Associates, regarding the hotel tower (construction) contract. He said contractors believed that the Mohegan Tribe was just cutting deals with their favorite contractors and it was a waste of time to bid for work. Wolman said the lack of bidding companies was costing the Tribe a great deal of money.” Acevedo himself said the selection process was an orchestrated set-up while another witness said, "… it is obvious through the actions of the Tribe they planned on giving the ($29 million) contract to Manafort from the beginning …”
Former head of the Mohegan Tribal Gaming Commission, Bud Mullen, was documented as saying there was suspected abuse in connection with some of the contracts related to the construction but that was not his area of responsibility.
Mullen, also a former assistant director for the FBI and head of the DEA, said he told then-chairman Roland Harris to be very careful of the the Tribe's construction representative Bill Katz (whom Harris hired at $30,000 per month and later increased to $50,000 per month), because Katz told them at lunch one day that “I can bury the cheese where the rats will never find it.”
See related articles at:
The Tropicana casino in Atlantic City is up for sale and the Mohegan Tribe is one of the groups expressing an interest in the property, which some analysts say could sell for $1 billion dollars.
One year after Columbia-Sussex received temporary approval to operate the hotel, the New Jersey’s Casino Control Commission voted 4-1 on Wednesday not to renew the license. Since the license denial, the casino has been in control by a state-appointed trustee.
The Casino Control Commission said that the operators of the Tropicana did not have the good character and business ability to run a "first-class facility of superior quality." The Tropicana did not adhere to the New Jersey Casino Control Act’s vision of "restoring Atlantic City as a resort, tourist and convention destination." Nearly one-quarter of the casino and hotel’s workforce was cut and there were complaints of uncleanliness.
At least a half-dozen companies have contacted officials about possibly buying the Tropicana. The Cordish Company of Baltimore is one of the potential buyers. Cordish is also in direct competition with the Tribe for a Kansas casino. The Cordish Company developed a $204 million outlet mall in Atlantic city and teamed up with former Tropicana executive Dennis Gomes to form a gaming management company. Pinnacle Entertainment, another competitor of the Tribe for a Kansas casino, and Steve Wynn are also named as being interested in the casino and hotel.
Massachusetts Governor Deval Patrick, casino and race track owners and others spoke to state lawmakers of the economic benefits that Patrick’s casino plan would bring to the state. The governor is asking lawmakers to authorize three casinos in the state because of the jobs and state revenue casinos would provide.
The hearing was not held by the committee charged with the casino plan but by the commission on bond issues and capital assets and was designed to begin discussions on the plan.
The hearing was the governor’s first high-profile appearance to push his casino plan since he announced it in September. His plan calls for three mega-casinos in the state: one in the western part of the state, one in the southeast and one in the Boston metropolitan area. He said the tribes from his state would have preference in the selection process.
The Mohegan Tribe’s tribal council chairman and the CEO of the Mohegan Tribal Gaming Authority, Mitchell Etess, spoke to the group of their vision for a casino in western Massachusetts but found that most legislators were more interested in the Mohegan’s contract with its former casino management company, Trading Cove Associates.
Trading Cove is backing the Mashpee Wampanoag Tribe for a casino in Massachusetts, a project that some see as having spurred the governor to announce his own casino plan. The Mashpee’s casino is being done under a federal law that grants a federally-recognized tribe the right to operate the same games of chance on their reservation as those allowed under state law. Massachusetts allows charities to run casino games, a right which must be extended to tribes.
The principal partners of Trading Cove, Sol Kerzner and Len Wolman, also operate one of the two Rhode Island racetracks permitted under state law to operate slot machines. Twin River has 4,500 slot machines and draws customers from Rhode Island and southern Massachusetts.
Control of the Casino Regardless of its Cost?
The Mohegan Tribe bought out the last three and a half years of Trading Cove’s 7-year management contract to allow the tribal council under then-chairman Roland Harris to control the Mohegan Sun casino and a $1.2 billion (Sunburst) expansion.. In return for this control, the Tribe pays Trading Cove 5% of every dollar taken in at the casino for a 15-year period. The Tribe is expected pay Trading Cove in excess of $1 billion before the contract expires on December 31, 2014.
Sheldon Adelson of Las Vegas Sands Corporation said that Trading Cove’s partners were the "envy of a lot of people in the industry" for their deal with the Mohegans. Adelson, also the third richest man in America added, "I'm shocked that IGRA, that the BIA, allowed them to get away with it," Adelson said.
According to the Boston Globe, Trading Cove has spent almost $1 million since 2002 for lobbyists, including $495,000 since 2003 for lobbyist A. Bradford Card, the brother of President Bush's former chief-of-staff Andrew Card.
Adelson said he may not be interested in bidding for one of the licenses if the state allows more than two casinos.
The Mohegan Tribe and their partners announced their desire for a $1 billion casino resort complex in western Massachusetts that would include 4,000 slot machines, a 600-room hotel and a giant retail center.
The Tribe signed an exclusive agreement with Northeast Realty and Pennsylvania Real Estate Investment Trust, a developer of residential and office establishments, to seek one of the state’s proposed commercial casino licenses for a casino on 150 acres of land in Palmer, near the Massachusetts Turnpike in the western part of the state.
Governor Patrick, trying to stem opposition to his plan on moral grounds, argued that the state has always been involved in gambling "In 1762, John Hancock raised lottery money to rebuild Faneuil Hall after a fire. Lottery funds were used to finance the Revolution."
Patrick hopes that lawmakers vote on the casino bill before next July.
See Sean Murphy's article "Casino Jackpot Went To Investors" in the Boston Globe at:
All East Lyme public schools will be closed on Friday after an outbreak of the stomach flu virus hit a large number of middle school students, school officials said. On Wednesday, 189 students were absent and 133 on Thursday.
Superintendent Paul Smotas said in a statement that the middle school "experienced an unusually high number of absences and of students needing to be sent home from the nurse's office."Most of those students were experiencing symptoms connected with the Norovirus, which causes nausea, vomiting and diarrhea for up to two days.
The Pennsylvania state police gaming enforcement office at the Tribe's Pocono Downs racetrack-slot parlor said a man allegedly refused to return money after he was mistakenly overpaid by a cashier, according to the Times Leader paper. The man redeemed two vouchers in the amount of $1,178 on Monday. Police said the man was overpaid $600 and refused to return the money. The name of the man wasn't released.
The Day newspaper's David Collins' thoughts on what some people may want for Christmas. Included on the list are the Mohegans and further on, Mitchell Etess:
The Mashantucket Pequot Nation has named its first CEO to oversee all gaming, resort and entertainment operations for the Tribe. Patricia Irvin, a graduate of Harvard Law School and a former deputy assistant secretary of defense during the first Clinton administration, is expected to focus on the Tribe’s diversification efforts.
Irvin also worked for 14 years at a prominent Wall Street law firm, Milbank Tweed, and was chief operations officer for the Andrew W. Mellon Foundation in New York City.
Tuesday, December 18, 2007
Slot revenues at both the Mohegan Sun and Foxwoods casinos declined in each of the last three months, continuing a downward trend that began last Spring.
Competition in New York and Rhode Island and a weaker economy and higher gas prices may be partially responsible for the decline but fewer slot machines in use on the gaming floor also played a role.
The Mohegan's business arm, the Mohegan Tribal Gaming Commission (MTGA), reported $70.5 million in November slot revenue at the Mohegan Sun casino, a 3.8 % decline from the same month in the prior year. Overall, slot revenues declined 2.7% in the three month period of September through November while wagers at the machines, also known as slot handle, fell by 4.5%.
Since April, slot machine wagers at Mohegan Sun have decreased for 6 of the last 8 months. Overall, the handle fell by 2.4% at Mohegan Sun in the last 8 month period while wagers at Foxwoods have risen over that same period by less than one percent. By comparison, for the 15 months prior to April, the handle at Mohegan Sun fell only once - in December 2005.
Although figures for the number of slot machines and the daily win-per-machine for November were not available, on average Mohegan Sun had about 200 fewer slot machines in use between April and October of this year when compared to that same period in the previous year. Mohegan Sun's win-per-slot machine for April through October was $432 compared to $420 for the same period in the prior year. Foxwoods, on the other hand, had an average of 135 more machines in use from April through October this year than in the past year.
Slot machine revenue at the Mohegan Sun alone accounts for over 50% of the Mohegan Tribal Gaming Authority’s total revenues, contributing $922 million out of the $1.75 billion in total MTGA revenue for the twelve months that ended in September, or Fiscal Year 2007. The amount wagered at slot machines is not included in the revenue, only the amount lost by customers (wagers, or handle - less payouts) is counted as slot machine revenue.
Slot machine revenue at both the Mohegan Sun and Pocono Downs, combined, accounted for nearly two-thirds of MTGA’s $1.75 in total revenue for the last fiscal year.
Last week, Foxwoods also reported a decline in November slot revenue. They reported $58.9 million, a decrease of slightly over 1% from the prior year. Like Mohegan Sun, Foxwoods slot revenue has also declined in each of the last three months but their slot handle actually increased in two of those months. In the last three months, slot revenues decreased overall by 5.6% while the handle went down by 1.3% over that same period.
For the month of November, the Mohegan Sun reported $814 million in slot handle, a 3.4% decrease from the prior year. Foxwoods reported $734 million in handle, an increase of 6.7%. Had Foxwoods not increased the percentage of its handle paid out to its customers in November, its revenues would have reflected an increase compared to the prior year. Mohegan paid out 91.35% of its November handle and Foxwoods paid 91.97%.
Mitchell Etess attributed the declines to weaker consumer confidence and was quoted in The Day newspaper of New London, CT "Overall, when you compare our declines to Atlantic City, we feel like we're holding our own." Slot revenues at Atlantic City's 11 casinos fell by 12.6% in both September and October, reflecting in large part a barrage of new casino openings over the past year in neighboring Pennsylvania. This year is almost certain to become the first year in the state's 29 year casino history that casino revenues will have declined from the prior year.
The month of December may extend the slot declines at both casinos if only because last December may be hard to beat: In December 2006, the Mohegan Sun had its largest monthly increase in its slot handle for the past two and a half years and Foxwoods recorded an 11% increase in its December slot handle last year.
The winter storm in recent days couldn't have helped revenues at either casino. The Tribe's Pocono Downs race track-casino in Pennsylvania continued to record record low revenues since the competing Mount Airy Casino opened in late October. In the week that ended on Sunday, slot revenues were down by 37% since the week before Mount Airy Casino opened.
The daily win-per-machine at Pocono Downs was $275 for last week compared to $439 in the week before Mount Airy Casino opened. Since Mount Airy Casino's opening, the daily win-per-machine has averaged $325 per machine.
Currently, Mohegan Sun has about 6,200 slot machines and Foxwoods has about 7,200 machines.
Upon completion of their current expansions, Foxwoods expects to have a total of 8,650 slot machines and the Mohegan Sun plans to have 7,000 machines.
Note: MTGA's FY 2007 income statement shows gross revenue of $1.75 billion and is comprised of the following:
Gaming Revenue $1.1 billion
Table Game Revenue $395 million
Entertainment and Retail Revenue $133 million
Food and Beverage Revenue $102 million
Hotel Revenue $47 million
The gross revenues of $1.75 billion are reduced by promotional allowances of $132 million to arrive at net revenues of $1.62 billion in the last fiscal year, which ended on September 30, 2007. This figure of $1.75 billion less expenses equals the profit. This article doesn't deal with expenses, however it should be clarified that Pennsylvania taxes and payments to the state of Connecticut and to Trading Cove Associates are classified as expenses on the income statement.
The Tribe pays the state of Connecticut 25% of its slot revenues and pays Trading Cove Associates 5% of the slot revenues (and other revenues) at Mohegan Sun. The Tribe pays 55% of its Pocono Downs slot revenue to the state of Pennsylvania.
Saturday, December 15, 2007
Friday, December 14, 2007
Officials from Wyandotte County-Kansas City forwarded the Mohegan Tribe's $770 million casino proposal and two others to the state lottery commission yesterday, signalling to the commission that any one of the proposed casinos would be acceptable to them.
In addition to the Mohegan proposal, county officials forwarded proposals from Pinnacle and from a partnership between Kansas Speedway and the Cordish Company. All three are proposing casinos within a mile of the Village West entertainment district and will also be competing with Golden Gaming's $600 million casino, the only proposal forwarded by local officials in Edwardsville.
Only one of the four will be selected by the Kansas Lottery Commission in May.
The Mohegans, partnering with principals from Kansas City-based RED Development and Las Vegas-based Olympia Gaming, proposed a $770 million casino, while Pinnacle priced its casino at $650 million and the partnership between Kansas Speedway and the Cordish Company would build a $670 million Hard Rock casino.
Thursday, December 13, 2007
New York Governor Eliot Spitzer has not selected a gaming operator for the Aquaduct race track, located in the Queens Borough of New York City, nor has it been decided whether gaming will also happen at Belmont race track.
The governor originally sought companies to operate both the horse racing and gaming at the tracks but later chose the company that currently runs the racing to continue in that role while he sought new proposals for the gaming aspect.
A thiry-year franchise to operate three race tracks was negotiated between the governor and the New York Racing Association (NYRA). NYRA's current half-decade old franchise is set to expire in less than three weeks, on December 31st.
The winning bidder will need to be approved by the state legislature and the governor's staunchest opponent of the choice of NYRA to operate the racing is Senate Majority Leader Joe Bruno. Negotiations between Bruno and the governor's office have not yet produced an agreement but it appears as if a temporary agreement may be reached as early as tomorrow to confirm the governor's selection of NYRA for the racing franchise.
Wednesday, December 12, 2007
The Mashantucket's quest for a Kansas casino ended today when officials from the county in which it was planned agreed to forward two competing casino applications to the state for final consideration.
Sumner County officials chose the proposals by Penn National Gaming and Marvel Gaming (casino executives and family members of the Binion Family Trust) and will now forward these proposals to the state lottery commission, which will decide the winning bid. Selection of all winning casino proposals by the commission is scheduled for May 12, 2008 according to reports.
The Mohegan Tribe and their partner's $770 million Kansas casino proposal is in a different region of Kansas, Wyandotte County, and is not competing with the Mashantucket proposal. A formal announcement is expected tomorrow regarding the approval of the Kansas casino proposed by the Mohegan Tribe and their partners. So far only one of the Mohegan's competitors, Las Vegas Sands, was eliminated by the local county government and they have chosen not to fight the county's decision.
The Mashantucket Pequot team hasn't ruled out challenging the local county government's decision.
Feather News Note: A partnership between the Kickapoo and the Sac and Fox Tribe of Kansas, one of the Mohegan Tribe's competitors in Wyandotte County-Kansas City, withdrew their proposal on Wednesday. Four bidders, including the Mohegans and their partners and a proposal from Edwardsville, still remain in the running for a casino in their region. The Tribe will find out on Thursday if their application passed a preliminary but key review.
See related article:
The Mohegan's proposal for a Kansas casino is expected to pass its first major hurdle on Thursday, when local government officials in the northeastern county of Wyandotte are scheduled to announce those casino proposals they will forward to a state commission for final consideration.
Four of the five original bidders for the one casino license in that region are still in the race. So far, Las Vegas Sands Corporation is the only bidder that has been eliminated from the group. The county commissioners could forward all four remaining applications, including the Mohegan proposal.
The state lottery commission is authorized to select one casino out of both the Wyandotte group of proposals and a lone proposal forwarded by Edwardsville County. Both counties are near Kansas City on the Missouri border. The winning proposal could be selected by this Spring.
The Tribe and its partners, Olympia Gaming and RED Development principals, unveiled a $770 million resort proposal, featuring a 1,000 room hotel, a casino with 3,500 slot machines and 90 table games, a golf course and 200,000 sqare feet of retail space, among other attractions.
See related article:
Tribal members are encouraged to attend.
Last week's Wuskuso - issue number 48 for the year - was the membership's notification of the special membership meeting this week, so it should be noted that the newsletter was posted to the tribal government official website just yesterday, December 11th, and not on December 5th as stated on the government website.
Tuesday, December 11, 2007
The Pennsylvania Gaming Control Board reports on the weekly slot machine revenue for the Tribe’s Pocono Downs and at other gaming properties in the state.
According to these public figures, about $42 million went into the slots at Pennsylvania’s Pocono Downs in the week before the Mount Airy Casino opened. About 91% of this amount is paid out by the slot machines to customers ($38 million) and after deducting certain promotions, the amount remaining - the casino’s win, or revenue – was $3.7 million for the week.
Six weeks after the opening of the Mount Airy Casino, which is located about twenty miles away from the Tribe’s Pocono Downs, the revenues have dropped significantly.
In the week that ended Sunday, Pocono Downs recorded $28 million played at the 1,203 slot machines. After deducting the amount paid out and promotions, the amount remaining was $2.4 million. This was its lowest take since the Mount Airy Casino opened in late October.
Sunday, December 9, 2007
A high-profile gaming hearing will be held by the Massachusetts state legislature on December 18th to discuss Governor Deval Patrick’s proposed casino plan.
Donald Trump and the CEO of Harrah’s, Gary Loveman, are among the speakers invited to appear before the legislature’s committee on bond issues and capital assets. Other speakers will include three of Patrick’s cabinet secretaries, economic experts and the state’s revenue commissioner.
The governor announced in September that he wants the state to license three commercial casinos by 2012 but needs the state legislature’s approval. House Speaker Sal Dimasi (D-Boston) approved the committee’s hearing though he is opposed to gambling.
Even the two co-chairs of the committee holding the hearing have differences on gambling. One of the bonding committee’s co-chairs, Rep. David Flynn (D-Bridgewater) wants the legislature to vote on casinos in 2008 and not in 2009, as some lawmakers would prefer. The other co-chair of the committee, Sen. Mark Montigny (D-New Bedford) told the Boston Globe, “It’s of no help to us if we get a sales pitch from casino interests with a little extra theater from Donald Trump.”
The Mohegan Tribe and their partners announced their desire for a $1 billion casino resort complex in western Massachusetts that would include 4,000 slot machines, a 600-room hotel and a giant retail center.
The Tribe signed an exclusive agreement with Northeast Realty and Pennsylvania Real Estate Investment Trust, a developer of residential and office establishments, to seek one of the state’s proposed commercial casino licenses for a casino on 150 acres of land in Palmer, near the Massachusetts Turnpike in the western part of the state.
Thursday, December 6, 2007
Four Indian tribes currently run casinos in Kansas but a law passed last spring would expand gaming in that state by allowing four new major casino-hotels and 2,800 slot machines at three race tracks.
The legislation allows for one major casino in each of four different regions in the state. Wyandotte County/Kansas City is one of the regions.
A total of five groups submitted proposals to build a casino in Wyandotte County, including the Mohegan Tribe. While the Mohegan Tribe and three other groups received zoning approval from the county this week, the Las Vegas Sands Corporation’s zoning application for a $500 million project was rejected.
These four proposals will go through another round of county government hearings next week regarding the economic and community effects of each proposal and will be voted upon on December 13th by the county, determining which of the proposals will be submitted to the state’s lottery commission. The lottery commission has the ultimate authority to select the winning proposal.
The four groups and the cost of their casinos proposed for Wyandotte County are the Mohegan Tribe and their partners Olympia Gaming and RED Development ($770 million), Pinnacle Entertainment ($650 million), Fox Tribes partnering with Kickapoo-Sac Tribe ($300 million), and the Cordish Company partnering with Kansas Speedway ($600 million). The gaming law states that the minimum investment must be $250 million, which includes a $25 million "privilege" fee.
The Fox Tribes and the Kickapoo-Sac Tribe have reservations in the northeast corner of Kansas along with two other tribes, the Iowa and the Prairie Band Potawatomi. In 2004, Governor Kathleen Sebelius approved a compact with the Fox Tribes and the Kickapoo-Sac for a $210 million casino in Wyandotte County but it was not approved by the legislature. Under the compact, the tribe would have shared casino revenues with the state. The four tribes operating casinos in the state currently do not pay the state any revenues from their casinos.
The Mashantucket Pequot Nation recently announced that it was partnering with MGM Grand and the Iowa Tribe to build a casino in another location of Kansas. The Mashantucket's Foxwoods Development proposal is not in competition with the Mohegan Tribe’s proposal. Mashantucket will be in competition with Penn National, the former owner of the Pocono Downs racetrack in Pennsylvania, and two other bidders in Sumner County.
Under the Kansas Constitution, only Indian tribes and the state can operate casino gambling. The constitutionality of the new gambling legislation is currently being challenged in county court and is expected to eventually go to state court. At issue is whether the casinos can be privately owned or whether they must be owned by the state.
A Jackpot for Unions?: Organizing Indian Casinos
By The NYT Editorial Board
With unions in a prolonged decline, there has not been a lot of good news lately for the labor movement.
But there was some last month in Connecticut — a modest jackpot, so to speak. Three thousand dealers at Foxwoods Resort Casino — the sprawling Connecticut gambling mecca — voted to join the United Auto Workers. The vote was the first union inroad at either of the two Native American casinos in Connecticut, for good reason: It was only this year that a court decision opened the door to Indian casino workers who want to organize.
The United States Court of Appeals for the District of Columbia Circuit ruled in February that tribes must follow the National Labor Relations Act, which protects employees’ collective bargaining rights. The tribes have long argued that since their casinos are located on reservations, they were subject to tribal law –and exempt from the NLRA.
The Mashantucket Pequot Tribe, which owns and operates Foxwoods, vowed to appeal to the National Labor Relations Board, and possibly federal court, too. Until those appeals run their course, not much will happen at Foxwoods, which has seen far more union organizing than the nearby Mohegan Sun casino, owned by the Mohegan Tribe.
It may seem odd to see the United Auto Workers organizing blackjack dealers, but the union is simply going where the jobs are. Between them, the two Connecticut casinos employ more than 20,000 workers —not just dealers, but cooks, food workers, and other job categories — none of whom belong to a union.
Nationally, tribal gambling employs more than 600,000 people, and takes in an estimated $25 billion a year.It’s only a start, but 3,000 dealers could be a small sign that labor’s fortunes are beginning to change.
Feather News Note: Foxwoods contested the November vote with the National Labor Relations Board on December 3rd, for lack of jurisdiction and alleging improper voting procedures and misconduct. Dealers at Foxwoods voted on November 24th by a margin of 1,289 - 852 to allow the United Auto Workers union to bargain on their behalf with the casino.
The St. Regis Mohawk Tribe could reap billions from a casino that was never built.
The United States District Court for the Northern District of New York denied a motion by a subsidiary of Harrah’s Entertainment, which sought to dismiss about $3 billion in judgments issued against them by the St. Regis Mohawk Tribal Court for interfering with the Tribe’s planned casino in the Catskill Mountains in New York. Park Place but was the company that is alleged to have interfered but Harrah’s bought out Caesars, who had previously bought out Park Place.
At the time a key federal approval was received for the Catskills casino, Park Place allegedly induced chiefs of the tribe to switch casino management companies, which forced the tribe to begin the federal application process over again and resulted in an aborted casino project. The plaintiffs state that a casino would have been built had Park Place not interfered.
Harrah’s never showed up in tribal court so a default judgment for about $1.8 billion was issued against them. Since then, the tribal court has added about $1 billion in interest costs and reimbursement for court house postage costs, bringing the total to about $3 billion.
Former New York State Attorney General Dennis C. Vacco, a trustee for an entity representing the plaintiffs, commented “We are pleased with this ruling denying Harrah's motion to dismiss the complaint. The Tribe deserves to have its institutions respected and also deserves to have the decisions of the Tribal Court honored by the federal courts."
The tribe is still seeking to build a casino in the Catskills and is now waiting for land it owns there to be placed into federal trust.
The St. Regis Mohawks filed a federal lawsuit last month to compel Secretary of the Interior Dick Kempthorne to to put about 30 acres into federal trust for its proposed casino in the Catskills. The lawsuit asked the U.S. District Court in Washington, D.C., to order Kempthorne to make a decision on the tribe's application within 30 days. The tribe alleges that Kempthorne's personal opposition to off-reservation gaming is interfering with his legal responsibilities. When Kempthorne was the governor of Idaho, he was opposed to off-reservation casinos.
Kempthorne has been reported as saying that if he approves one of the off-reservation casino applications, then he has to approve them all.
Friday, November 30, 2007
Ballots were sent to 1,076 adult tribal members according to the election committee.
Tuesday, November 13, 2007
Wednesday, November 7, 2007
The National Labor Relations Board yesterday announced that they will conduct a union vote among the 3,000 dealers at Foxwoods casino on November 24th.
The Mashantucket Pequot Tribe, the owners of Foxwoods casino, said that they will fight against any unionization on their land in federal courts, which will likely stall the matter for years.
"We'll take it all the way to the Supreme Court if need be,” said Saverio Mancini, a Foxwoods spokesman and former Mohegan Sun public relations manager.
See related article at http://feathernews.blogspot.com/2007/10/feds-approve-union-vote-at-foxwoods.html
The Passamaquoddy Tribe´s quest for a harness racetrack with 1,500 slot machines in Maine appears to have been rejected by a majority of Maine´s voters in yesterday´s referendum.
The Passamaquoddys had hoped to build a racetrack with slot machines and bingo but 52% of the voters were against it, based on 80% of the state´s precincts vote tallies.
Earlier this year, the state´s legislature passed a bill that would have authorized the tribe to build a racetrack and casino but the governor vetoed it. The sole casino operator in Maine is Penn National Gaming, the former owner of Pocono Downs in Pennsylvania.
See related article at http://feathernews.blogspot.com/2007/10/passamaquoddy-referendum-in-maine.html
Tuesday, November 6, 2007
The following news from the White House declares November 2007 "National American Indian Heritage Month" by proclamation of the President of the United States of America:
National American Indian Heritage Month is an opportunity to honor the many contributions of American Indians and Alaska Natives and to recognize the strong and living traditions of the first people to call our land home. American Indians and Alaska Natives continue to shape our Nation by preserving the heritage of their ancestors and by contributing to the rich diversity that is our country's strength.
Their dedicated efforts to honor their proud heritage have helped others gain a deeper understanding of the vibrant and ancient customs of the Native American community. We also express our gratitude to the American Indians and Alaska Natives who serve in our Nation's military and work to extend the blessings of liberty around the world.
My Administration is committed to supporting the American Indian and Alaska Native cultures. In June, I signed the "Native American Home Ownership OpportunityAct of 2007," which reauthorizes the Indian Housing Loan Guarantee Program, guaranteeing loans for home improvements and expanding home ownership for Native American families. Working with tribal governments, we will strive for greater security, healthier lifestyles, better schools, and new economic opportunities for American Indians and Alaska Natives.
During National American Indian Heritage Month, we underscore our commitment to working with tribes on a government-to-government basis and to supporting tribal sovereignty and self-determination. During this month, I also encourage Federal agencies to continue their work with tribal governments to ensure sound cooperation. Efforts such as on-line training programs will improve interagency collaboration in the Federal Indian Affairs community and help to strengthen relationships with tribes, building a brighter future for all our citizens.
NOW, THEREFORE, I, GEORGE W. BUSH, President of the United States of America, by virtue of the authority vested in me by the Constitution and laws of the United States, do hereby proclaim November 2007 as National American Indian Heritage Month. I call upon all Americans to commemorate this month with appropriate programs and activities. IN WITNESS WHEREOF, I have hereunto set my hand this thirty-first day of October, in the year of our Lord two thousand seven, and of the Independence of the United States of America the two hundred and thirty-second.
GEORGE W. BUSH
Members of the Mashantucket Pequot Nation re-elected one incumbent and elected one new councilor to its seven-member tribal council.
MarjorieColbut-Jackson was re-elected and the new tribal councilor is Maureen Sebastian. They will serve for three-year terms. Tribal Councilor Chalita Young was not re-elected.
The other members of the tribal council are: Michael Thomas (chairman), Kenneth Reels (vice chairman), Charlene Jones (secretary), Rodney Butler (treasurer) and Richard E.Sebastian.
Friday, November 2, 2007
Pocono Downs´ weekly gaming revenue fell by about 20% in the first week since a competing casino in the Poconos opened last week.
Mount Airy Casino, located about twenty miles from Pocono Downs, opened October 22nd with 2,523 slot machines and four restaurants. A 188-room hotel is scheduled to open on November 15th.The $412 million casino is the first of the five stand-alone casinos to open in Pennsylvania. The casino is expected to increase the number of slot machines to about 3,000 upon the completion of an expansion in 2008 when it will also add 212 more hotel rooms, a conference center and retail shops.
All casinos in Pennsylvania report gaming revenues on a weekly basis to the Pennsylvania Gaming Control Board. Pocono Downs reported $3.06 million in gaming revenues (the amount lost by customers) for the week that ended on October 28th versus $3.7 million in the prior week.
The extent of continuing losses at Pocono Downs will not be known until the Mohegan Tribal Gaming Authority issues its fourth quarter report in December. That report, however, will not cover the period in which the Mount Airy Casino has been open but will cover the period of July 1 through September 30.
See related article at: http://feathernews.blogspot.com/2007/10/mount-airy-casino-to-open-today.html
Pennsylvania casino gaming revenues by location for the week ending Oct 28th: http://www.pgcb.state.pa.us/gaming_revenue/2007_10-22_gaming_rev.pdf
The Narragansett Tribe re-elected Matthew Thomas as Chief Sachem on October 27. Thomas received 306 votes and the only challenger, Paulla Dove Jennings, recieved 145 votes.
Jennings publically disagreed with the Narragansett Tribe´s decision to remove people from their tribal rolls. About 140 members who could not prove they descended from ancestors listed on an 1880 tribal census were recently removed from the rolls.
Wednesday, October 24, 2007
In a decision that could eventually affect the Mohegan Tribe, a federal labor official ruled this afternoon that a union election be held at Foxwoods Resort Casino, located on the Mashantucket Pequot reservation in Connecticut.
The decision is a setback for the Tribe but the fight for its sovereignty is not over.
The ruling by Peter B. Hoffman, a regional director for the National Labor Relations Board (NLRB), would allow table dealers to vote on whether to join a union. The United Auto Workers (UAW) union petitioned the NLRB last month and is trying to organize 3,000 dealers at the casino.
No date has been set for the union election and the Tribe is expected to appeal the decision, maintaining the position that the Tribe is not subject to federal labor law.
Hoffman wrote, "I find that the incidental affects on tribal government that could potentially occur as a result of the application of the (National Labor Relations Act) to Foxwoods’ employees, which the employer claims would directly threaten the tribe’s political or economic security, are insufficient to deny the exercise of the board’s jurisdiction," he wrote.
Hoffman pointed to a ruling in the San Manuel Indian Casino case which decided that tribal businesses that are acting in interstate commerce do not fall under the ‘self-governance’ exception that apply to Indian tribes.
The Mashantucket Tribe responded by saying,“The UAW would like people to believe that this issue is about the right to organize; this is not the case. The issue is one of respecting the Tribe as a government. The Tribe has enacted a Tribal Labor Relations Law which gives employees the right to organize and bargain collectively if they choose. Tribal employees are government employees, in the same way that State employees are government employees and the Tribal law was modeled after other government’s labor laws, including Connecticut’s.
“We strongly believe that the NLRB does not have jurisdiction as the Tribe is the governing body which has the inherent authority to regulate employment on its reservation and it has historically done so. The UAW would like people to believe that the Tribe is not being fair-in fact it is the Union that is not being fair.
“There is a simple way to respect the Tribe as a government and at the same time address any organizing interests of our employees. That would be to file the petition pursuant to Tribal law. The UAW would prefer to litigate this for years to come in their attempt to undermine Tribal government, instead of respecting what they claim are employee concerns and addressing their issues in the tribal forum.”
The Aquinnah Wampanoag Tribe has partnered with the Seneca Nation of New York to jointly bid for one of the three Massachusetts commercial casino licenses proposed by Governor Deval Patrick.
If the Aquinnah Wampanoag Tribe does not win one of the three commercial licenses, they will launch plans build a casino on tribal land. One of the locations under consideration by the tribe is the city of Palmer, which is in the western part of the state and is the same location where the Mohegan Tribe has also expressed interest for a casino.
The Aquinnah Wampanoag Tribe is located on Martha's Vineyard but will likely seek to add land into trust in another part of the state if they do not win one of the three commercial casino licenses. Another Federally-recognized in Massachusetts, the Mashpee Wampanoag Tribe, recently sent an application to the U.S. Department of the Interior to take 160 acres of land into trust in the town of Mashpee and 550 acres in Middleborough. The Mashpees are proposing a $1 billion casino in Middleborough, near the east coast town of Plymouth. The Mashpee's partners are Sol Kerzner and Len Wolman, the developers of Mohegan Sun and owners of a casino and racetrack in Rhode Island.
The Seneca Nation operates three casinos in or near Buffalo, New York.
Monday, October 22, 2007
After completing two days of trial runs to the satisfaction of state regulators this past weekend, the Mount Airy casino will open its doors to the public today.
A grand opening ceremony is scheduled for 11:00 this morning and the public will be admitted at noon. The casino´s four restaurants will also open today while the 188-room hotel is scheduled to open on November 15th.
The $412 million casino is the first of the five stand-alone casinos to open in Pennsylvania. The casino currently has 2,523 slot machines and is expected to increase that number to about 3,000 slot machines upon the completion of an expansion in 2008 when it will also add 212 more hotel rooms, a conference center and retail shops.
The casino´s owner, Louis A. DeNaples, still remains under investigation by a grand jury to determine whether he misled gaming regulators by denying ties to organized crime. The Pennsylvania Gaming Control Board last week approved an independent committee that will oversee the casino pending the outcome of the investigation.
Mount Airy casino´s opening is expected to reduce the slot machine win in the near term at the Mohegan´s Pocono Downs´casino, located about twenty miles away. The Mohegan´s Pocono Downs casino, which doesn´t have a hotel, opened last year with 1,099 slot machines and now has 1,203 slot machines. Two hotels in the Poconos that are seeking to install 500 slot machines made presentations to the Pennsylvania Gaming Control Board this week. If approved, the Poconos region would host a total of four casinos.
In related news, the Pennsylvania Gaming Control Board announced last Wednesday that it has revoked the licenses of two employees of Mohegan Sun at Pocono Downs. The revocations of the licenses for Brian Lee Baker and Frank Bergamino were effective October 2nd.
Note: Hours after the posting of this article, the Mount Airy Casino opened. A brief report can be found at:
The Pennsylvania Gaming Control Board publishes slot machine figures on a weekly basis and can be found at: http://www.pgcb.state.pa.us/gaming_revenue.HTM
Old postcards of the former Mount Airy Lodge, a popular resort destination in the 60's and 70´s and later purchased by DeNaples in 2004 for $25 million as the site for the Mount Airy Casino, can be fount at the following web address:
Thursday, October 18, 2007
Mount Airy Casino, located about twenty miles from the Mohegan´s Pocono Downs, is scheduled to open this Monday.
The Mount Airy Casino was to open last Monday but had not yet recieved state approval of the composition of its audit committee and had not gone through the required two days of dry-runs, also required by the state. Yesterday, the audit committee was approved by the Pennsylvania Gaming Control Board and the two days of dry-runs, in which the proceeds from an invitation-only crowd will go to charities and activities are monitored by state regulators, are scheduled for Friday and Saturday.
The resort, which is in the tourist section of the Poconos, will open with approximatel 2,500 slot machines while its hotel is scheduled to open in November.
Tribal member Gary E. Burgess, 62, passed away October 4, 2007. He lived in Tampa, Florida.
Gary was a member of the Moose Lodge and was an alumni of the University of South Florida. Gary retired with 30 years of service as a general operations manager with the State of Florida Department of Health´s Office of Disability.
Gary´s nephew Gene Burgess, Jr. said, "Gary was well liked and generous to all that he walked with through his life. Gary was born with severe physical disabilities and spent several years of his childhood at Shriners Hospital going through surgeries and therapy. Nevertheless, Gram and Gramp said he always had a smile on his face. He was married and remained virtually independent his entire adult life. Gary had a quick wit and a hearty laugh that endeared him to his friends."
On November 6th, Maine voters will decide on a referendum for a racino to be run by the Passamaquoddy Tribe. If approved, the tribe would move closer to operating a harness racing track with up to 1,500 slot machines.
Although the tribe has over 200,000 acres of land, the slot facility is likely to be built in Calais, in Washington County, where the tribe has options on 700 hundred acres of land, according to reports.
Slot machines are currently allowed at Hollywood Slots near the Bangor Raceway, which opened in 2005. Hollywood Slots is owned by Penn National,which owns 24 casino gaming, horse racing and off-track wagering and slot machine facilities and was the owner of Pocono Downs race track prior to selling it to the Mohegan Tribe for approximately $280 million.
In 2003, a referendum in Maine was approved by voters to allow up to 1,500 slot machines at commercial harness-racing tracks in Bangor and Scarborough. Another Maine tribe, the Penobscot Tribe, has proposed 400 slot machines at their high-stakes bingo facility on Indian Island. The Penobscot´s proposal will be considered in the legislature´s next session.
Six groups have submitted bids for the franchise to operate up to 4,500 video lottery terminals, which are similar to slot machines, at New York´s Aqueduct Race Track.
Among the six groups are entities controlled by the Mohegan and Mashantucket Pequot tribes. Two tribes in New York, the Shinnecock and Seneca, have also applied for the franchise. Some of these tribes have partnered with other companies in their proposals. The Shinnecocks said they would drop their plans for a Long Island, N.Y. casino if they are selected to run the Aqueduct gaming.
In early September, New York Governor Eliot Spitzer recommended that New York Racing Association (NYRA) be awarded a franchise to conduct thoroughbred racing at the state-owned facilities at Aqueduct Race Course, Belmont Park, and Saratoga Raceway. The Mohegan Tribe and its partner, Capital Play, had submitted one of the rejected bids.
After the selection of NYRA to continue running the race tracks, Governor Spitzer said, “After careful consideration, I concluded that a reconstituted NYRA is the best entity to operate thoroughbred racing in New York State. The state, in consultation with NYRA, will choose an experienced gaming operator to operate the VLT franchise at Aqueduct. This will ensure that we have the best possible operator for both the racing and the gaming franchise.” The governor announced that he would re-bid the gaming aspect of the franchise and asked that new proposals be submitted by October 15th.
Along with the four tribes, Delaware North Companies Gaming & Entertainment and their partner, Saratoga Gaming and Raceway submitted a proposal as well as Greenwood Racing Incorporated. Other groups expressed their continued interest in running both the tracks and the gaming at Aqueduct but did not respond to the bid deadline earlier this week for the gaming franchise at Aqueduct.
The Mohegans formed a company called Mohegan Gaming, LLC specifically for the purpose of bidding on the Aqueduct gaming franchise. Mohegan Gaming is a subsidiary of the Mohegan Tribal Gaming Authority (MTGA).
The Mohegans originally partnered with Capital Play in their original proposal for the racing and gaming franchise. Mohegan officials and spokespeople for Capital Play have been publically critical of the governor over his selection of NYRA since his recommendation was made in September. Continuing in their criticism of the governor, Mohegan Sun casino officials told The Day newspaper this week that they would rather see Spitzer reverse his granting of the bid for the three race tracks to the New York Racing Association and give it to the Mohegans and Capital Play.
According to state law, New York´s legislature must approve the winner of the franchise, which is set to begin on January 1st. Republicans in the state Senate have proposed that a separate commission be set up to select vendors and manage the race tracks.
The Narragansett Tribe said that they will arrest any disenrolled members with trespassing if they try to vote in an upcoming election on October 27th that will determine the tribe´s next Sachem.
Tribal law enforcement officers will ask state and local police to arrest disenrolled members for trespassing if they interfere with the elections. More than 200 tribal members were kicked out of the tribe after a membership dispute last year. About half of them were reinstated after later producing documents showing their ties to the tribe.
The current Sachem, Matthew Thomas, is facing Paula Jennings in the election. Jennings is opposed to the removal of tribal members from the rolls. "These are the people that allowed us to get Federal acknowledgement in 1983. Their names were on the base roll, " Jennings told the Westerly Sun.
Thursday, October 11, 2007
Wednesday, October 10, 2007
By Ken Davison
In recent years, indigenous communities around the continent have redefined Columbus Day into a day of recognizing their ongoing battle for cultural and political survival despite the exploitation and genocide that resulted from the 1492 landing in the Caribbean.
Columbus first landed on the American continent in what is now Venezuela on his third voyage. Four years ago this country officially renamed the the day of October 12th, a day they traditionally celebrated as Columbus Day. It is now known as the Day of the Indigenous Resistance.
Montville´s Planning and Zoning Commission approved changes in their zoning regulations yesterday which could mean a massive residential development on the land abutting the Mohegan elder housing complex.
By a vote of 6-1 yesterday, the commission agreed to amend their regulations to create a housing opportunity development zone, possibly allowing for affordable housing on the 20-acre parcel of land.
The property had recently been up for sale for several years but the Tribe did not purchase the property. The proposal to the Planning and Zoning Commission was made by Vizion Enterprise to build 286 units on that parcel, of which 30% of the units would be affordable housing.
According to Vizion Enterprise´s presentation, four percent of the town of Montville´s housing is currently considered affordable housing while the state´s goal is 10% for each community. The property is described as being between 1710 and 1856 Norwich-New London Turnpike (Route 32) in Uncasville.
While the Planning and Zoning Commission´s vote approved the creation of an affordable-housing zone, the next step will be for the town to vote on the actual development.
Wednesday, October 3, 2007
Mohegan Chief G’tinemon died on October 1st in New London, Connecticut at the age of 88. Chief Ralph Sturges was the great grandson of the legendary Mohegan Medicine Woman Emma Baker.
I saw Chief Ralph Sturges at his home last month with my cousin Bill. We were greeted with the sight of a smartly-dressed Chief leaning forward in an armchair while reading the business section of The Day newspaper. He had only recently returned from the hospital but he spoke spiritedly. He was enthusiastic about a ceremony to be held later that day in which the head of the National Indian Gaming Association, Ernie Stevens, was to honor him.
The Chief helped guide the Tribe through its Federal recognition in 1994 and to the selection of a top-notch partner that built and managed the original Mohegan Sun casino. The Chief was jovial and witty and a man of integrity. He won over the outside community to support the Tribe’s endeavors at a time when the public was becoming increasingly nervous about having another Indian casino in the region.
When he stepped down from his duties as chairman of the tribal council for health reasons, the Tribe lost a prudent tribal council chairman who had espoused transparency in government and the need for the Tribe to pay off its debt. The Chief was privately critical of many decisions made by subsequent tribal councils, including the terms of the buyout agreement with Trading Cove, the Sunburst expansion and the Pocono Downs acquisition. Chief Sturges was upset that Roland Harris, who replaced him as chairman of the tribal council, was given only a reprimand after the internal corruption investigation of 2001. Shortly after the Chief’s departure from the tribal council, tribal membership meetings were changed from monthly to quarterly and tribal council meetings were closed off to tribal members (council meetings are now open to tribal members although members are barred from making comments or asking questions).
Ralph nonetheless remained the Tribe’s Lifetime Chief and continued to work daily to keep the outside community on our side. He was accessible to anyone on any day of the work week while he was at his office on the reservation or eating lunch at the Chief’s Deli or, in later years, the Uncas American Indian Grill in the casino. He loved the public and the public had a tremendous amount of respect for him.
But on that sunny September morning, he was not the Chief to me. He was a friend that I knew was going through a difficult time. I did not know the seriousness of his illness and he complained little of his condition. He spoke more fervently when the topics were about the Tribe. Chief Sturges told Bill and me to get the word out to tribal members about the honoring ceremony later that afternoon. He spoke of returning to his daily routine on the reservation. The Tribe was clearly still at the forefront of his thoughts. He talked again of tribal politics. He still sounded like the Patriarch.
Chief Sturges will forever be remembered by the people of the Mohegan Nation for the milestones we reached under his leadership. I will always remember him as the great patriot of our nation.
Saturday, September 22, 2007
By Ken Davison
Earlier this week, Massachusetts Governor Deval Patrick recommended three commercial casino licenses be awarded in that state and said that an Indian tribe would recieve preferential treatment for one of these casinos.
The decision, which needs legislative approval, has given both federally-recognized Indian tribes of that state more casino options. The tribes could either apply for one of the three proposed commercial licenses or they could take the path of forcing the governor to negotiate an Indian gaming compact.
Both of Connecticut’s Indian casinos are likely to feel the competition. The Mashantucket Pequots say 35% of their casino’s visitors are from Massachusetts while the Mohegans report about half that percentage of Massachusetts residents visit the Mohegan Sun.
The two federally-recognized Indian tribes in Massachusetts are the Aquinna Wampanoags, who were recognized in 1987, and the Mashpee Wampanoags, recognized just this past February. Neither Tribe has negotiated gaming compacts with the state. Massachusetts does not permit the charity casino nights that were once allowed in Connecticut and which helped pave the way for the first Indian casino in Connecticut, the Mashantucket Pequot Nation’s Foxwoods casino. Legalizing casino gambling in Massachusetts, however, will give the Mashpees and Aquinnas a stronger bargaining position.
In 2001, a third Massachusetts Tribe, the Nipmuck Tribe, was on the verge of receiving federal recognition but the U.S. Interior Department’s Bureau of Indian Affairs’ positive finding was reversed under the Bush administration and their petition was later denied in 2004. The Nipmucks are appealing the decision.
The Aquinna Wampanoag, Mashpee Wampanoag and the Nipmucks were officially recognized by the state of Massachusetts in 1976. The Mashpees tell of their tribe welcoming the Pilgrims at Plymouth in 1620 but it was the denial of a planned speech by an Aquinna Wampanoag man, Wamsuta, during celebrations of the 350th anniversary of the landing of the Pilgrims that sparked the Thanksgiving Day protests now held in Plymouth every year since 1970 and to which Indians from many tribes, including the Mohegans, have participated.
The Aquinna Wampanoags have trust lands in the town of Aquinna (Gay Head), in the southwest portion of Martha’s Vineyard Island. The Mashpees recently sent an application to the U.S. Department of the Interior to take into trust as their reservation 160 acres of land in the town of Mashpee and 550 acres in Middleborough. The Mashpees are proposing a $1 billion casino in Middleborough, near the east coast town of Plymouth.
The Pokanoket Wampanoag, neither recognized by the state or the federal government, sent a letter to the governor in August claiming the Mashpee’s proposed casino is infringing on their boundaries, as outlined in an 18th century map.
The Mohegans, with their partners, are likely to bid for one of the casinos. The Tribe announced a desire for a $1 billion casino complex in Palmer, located in western Massachusetts and in a path almost due north from their casino in Connecticut.
The two high-profile partners that developed and managed the Mohegan Sun, Len Wolman and Sol Kerzner, joined the partnership that is backing the Mashpee Wampanoag’s casino bid. Their company, Trading Cove Associates, managed the Mohegan Sun from its inception and until its seven-year contract was bought out on December 31, 1999 in a deal that agreed to pay Trading Cove 5% of the casino’s gross revenues for a fifteen-year period. Based on last year’s $1.5 billion in revenues at Mohegan Sun, Trading Cove earned about $75 million on their five percent formula in that one year alone. The Mohegan Sun, through its business arm Mohegan Tribal Gaming Authority, is expected to pay Trading Cove one billion dollars over this period, even if the casino revenues were to remain flat until the end of 2014. Wolman and Kerzner, among numerous ventures, also own a racetrack with slot machines (VLT’s) in Lincoln, Rhode Island.
Its not clear how long it may take until casinos are opened in Massachusetts. The state Legislature must first approve casino gambling, a bidding process for the licenses must be set up and background investigations completed before any casino construction can begin.
In just three weeks, the closest competition to the Tribe’s Pocono Downs in Pennsylvania will open. The Mount Airy Casino and Resort, located in the Mount Pocono resort area and just twenty miles east of the Tribe’s Pocono Downs, is scheduled to open on October 15th.
It is not known what effect this will have on the Tribe’s racetrack and slot parlor in Wilkes-Barre, Pennsylvania. The Mount Airy casino will have 2,500 slot machines and 200 hotel rooms.
About seventy miles northeast up the mountains from the Poconos are the Catskills of New York, where various Indian tribes are hoping to build casinos. The current head of the Bureau of Indian Affairs, Dick Kempthorne has said he is opposed to off-reservation casinos and that if he approves one then he would have to approve them all. The St. Regis Mohawk Tribe's bid for a casino in the Catskills has the support of New York Governor Eliot Spitzer but is stalled on Kempthorne's desk.
On September 12th, the New York State Division of the Budget (DOB) announced it was seeking expressions of interest from experienced gaming operators to operate a 4,500 machine slot machines (video lottery terminal, or VLT) at Aqueduct Racetrack and calls for responses by October 15th. The operation of VLT's at the Belmont Racetrack, which was included in the first round of bids, is not part of the new bid.
Capital Play, a firm that asked the Mohegan Tribe to join them in their bid, was knocked out of the bidding that ended when the governor announced that New York Racing Association was selected as the franchise to operate the state's three racetracks.
The Mohegan Tribe and its development partner, Capital Play Inc., said after the selection that they would submit a letter of interest to run a gaming facility at Aqueduct Racetrack. While they intend to bid on the gaming at Aqueduct, according to The Day, "the Tribe and Capital Play are nonetheless continuing to lobby the Assembly heavily not to accept Spitzer's awarding of a bid for the operation of the three tracks to the racing association and the separate deal for gaming."
Paul Francis, a senior advisor to the Governor said, “We believe that the Governor’s recommendation to award the racing franchise to a newly reconstituted NYRA—as the best operator of racing in New York State—while seeking an experienced gaming operator to operate the VLT facility offers the best opportunity available to enhance the racing industry in New York while generating the maximum revenue possible for education. We look forward to working with the legislature to translate the Governor’s proposal into law and are prepared to answer any questions they may have about the specific terms and conditions of the Governor’s recommendation.”
In a news release, the governor's office points out that "Funds from the VLT facility will provide sustained funding for elementary and secondary education, while also supporting the operation and improvement of the three thoroughbred racing facilities. The state will receive in excess of 70% of Net Machine Income (“NMI”) from the facility in the form of statutory payments for education and operation of the Lottery and approximately 14.5% of NMI will be dedicated to supporting thoroughbred horse racing in New York State. The remaining funds will be used to pay operating expenses including salaries, debt service, taxes, and a management fee if applicable."
The Aqueduct Racetrack opened in 1894. It is the only racetrack located within New York City limits and it also the New York Racing Association's headquarters. Mr. Spitzer has said he would submit a plan within two months for the awarding of the separate franchise to operate thousands of VLT's at the Queens racetrack.
In less than two years, the first and largest piece of financing for the Mohegan Sun’s $1.2 billion Sunburst expansion will come due for payment. For the second time since the expansion first opened in 2001, some might say.
Representing about a quarter of the Tribe’s total casino debt, $300 million was first borrowed in 1999 and was later paid off in 2003, when the Tribe’s business arm, Mohegan Tribal Gaming Authority (MTGA) borrowed $330 million at a lower interest rate (6 3/8% annual interest rate vs. 8 ¾% on the 1999 debt). This $330 million borrowing must be repaid on or before July 15, 2009. MTGA pays $21 million each year in interest expense on this debt alone and isn’t required to pay any of the $330 million amount borrowed until 2009, when the full amount that was borrowed must be repaid.
Due in part to refinancing, the rest of the Sunburst expansion debt won’t come due until the years 2012-2013 when $500 million will need to be repaid, and then the balance of the debt in later years.
Upon reaching the due date for the $330 million borrowing in the summer of 2009, MTGA will have paid over $200 million in just interest expense on that one piece of debt since it was first taken out in 1999. To put this amount in perspective, the $200 million in interest expense is about the equivalent to five per-capita distributions to tribal members.
The expansion will have been open for almost eight years by the summer of 2009 but it is unlikely that MTGA can generate the additional profits that would be needed to pay the $330 million debt. MTGA would then need to borrow money to pay for at least part of the debt. Nobody knows what interest rate would apply two summers from now but if MTGA refinances that debt using the same interest rate that applied in 1999 (8 3/4%) then that $21 million interest expense each year would spike to about $29 million annually.
Despite early announcements after the expansion by MTGA that it would pay down the Sunburst expansion debt aggressively, only about 18% of that debt has been paid off since the expansion first opened in 2001. The MTGA’s profits, as adjusted, suffered badly in the first three years after the expansion first opened, averaging $57 million in total profits for each of those three years (fiscal years 2002, 20003 and 2004) compared to the $140 million average profit for each of the last two pre-expansion years (fiscal year 2000 and fiscal year 2001). Since 2004, profits generated by the Mohegan Sun have doubled and are roughly equivalent to the profit levels of the pre-expansion years. Based on the most recent audit report, it is only when one includes the losses attributed to the diversification program that overall profits fall to slightly below the profit levels of those pre-expansion years.
MTGA first put a dent in the expansion debt in fiscal year 2003 - the same year of the $330 million borrowing - when the expansion debt was reduced by $50 million in that year. In the following three years, the expansion debt was further reduced by $81 million (FY 04), $65 million (FY 05) and $14 million in fiscal year 2006. Those payments total $210 million (not including expansion debt that has been refinanced), or 18% of the $1.2 billion expansion debt.
Although some of the expansion debt has been paid down, total MTGA debt has since increased due to the borrowings for the purchase and construction of Pocono Downs and the second expansion of the Mohegan Sun. As of June 30th, MTGA's total debt was approximately $1.3 billion compared to $1.25 billion a year earlier.
Note: This article focuses on one component of the debt and is not designed to give the reader a complete picture of the Tribe’s financial situation. It is our hope that through more articles covering the Tribe’s finances, the reader will gain a clearer understanding of the financial situation. In this article, the Mohegan Tribal Gaming Authority is referred to as “the Tribe” or “the casino.” The Tribe’s debt of $1.2 billion discussed in this article does not include tribal government debt or the approximately $1 billion the Tribe will pay to the former casino management partners, Trading Cove Associates, over a fifteen-year period. All profit figures have been adjusted to reflect actual payments to Trading Cove and do not take into account the $24.5 million reimbursed by Penn National to the Tribe in fiscal year 2006 This report is largely based on last year’s audit report (FY 06). The audit report for the current fiscal year (which ends on September 30, 2007) is expected to be released by the Tribe in December 2007.
MGM MIRAGE will provide the land and Kerzner and Istithmar will provide cash equity. MGM MIRAGE, Kerzner and Istithmar will own 50 percent, 25 percent, and 25 percent, respectively of the newly formed joint venture. The land being contributed by MGM MIRAGE is being valued at $20 million per acre. The new integrated resort complex is anticipated to be a multi-billion dollar project and will be financed through equity contributions and third-party debt financing, according to a press release.
The press release further states that Kerzner will lead the planning and conceptualization of this project. The joint venture is expected to draw upon MGM MIRAGE's substantial presence and experience in Las Vegas and Kerzner's experience in developing and operating some of the world's most recognized and successful destination resorts.
The Mohegan Tribe and the Mashantucket Pequot Tribal Nation each pledged $10 million to the Smithsonian´s NMAI. The Mashantuckets pledged $1 million per year for ten years in 1994 while the Mohegans said in 2001 that they would spread their donation over twenty years.
Gover will replace the NMAI's first director, W. Richard West, who served for 17 years.
Gover is a member of the Pawnee tribe and a former director of the Bureau of Indian Affairs (BIA) during the Clinton administration. As BIA chief, Gover issued a favorable preliminary determination in the Eastern Pequot federal-recognition bid, which was later overturned by the Bush administration.
Tuesday, September 11, 2007
Massachusetts Governor Deval Patrick is expected to announce that state's casino plans later this week or next week while Rhode Island's existing slot parlors could be expanded, according to one state official.
The chair of the state general assembly's Permanent Joint Committee on State Lottery, Pawtucket Rep. William San Bento said "Absolutely, we have to head that way," according to the Pawtucket Times.
If Massachusettts allows casino gambling, San Bento said Rhode Island could lose half of its video lottery terminal (slot) revenue. "The only way to protect that is with a full-fledged casino."
A referendum would need to be approved by Rhode Island voters both state-wide and in the host city-town community in which a proposed casino would be located. A state-wide referendum for a Narrangansett casino in West Warwick was defeated last November.
Monday, September 10, 2007
In August 2005, a decision by the U.S. District Court for the District of Columbia found that the Colorado River Indian Tribe could not be penalized for denying the National Indian Gaming Commission (NIGC) access to monitor the Tribe’s compliance with NIGC's Minimum Internal Control Standards (MICS) for Class III gaming.
The NIGC adopted MICS in 1999, which specifies the minimum practices tribes must follow when conducting Class II and III gaming. The case arose in 2001, during an audit of the Colorado River Indian Tribe’s Class II and Class III gaming operation at the Blue Water Casino. The Tribe challenged the NIGC's authority over Class III gaming and denied the NIGC access to Class III gaming records. The NIGC Chairman levied a Notice of Violation on the Tribe and a Civil Fine Assessment. Both the Notice of Violation and Civil Fine Assessment were overturned in the District Court decision in 2005.
In deciding that Congress did not intend to give the NIGC the authority to issue Minimum Internal Control Standards (MICS) for Class III gaming, U.S. District Court Judge John D. Bates warned that "this opinion should not be read to hold that the NIGC will never be able to audit a Class III gaming operation, or that the NIGC may not penalize a tribe that resists a valid audit."
The Senate may change the language of the law to strengthen Federal oversight. Senator Byron Dorgan (D-ND), chair of the Senate Indian Affairs Committee, presented a discussion draft bill in June 2007 that would amend IGRA class III regulatory responsibilities.
Last year, proposed changes to amend IGRA did not become law and at the most recent June hearing on the matter Senator Daniel Inouye (D-Hawaii) said he will do his utmost to make "disappear" any bill that comes out of the June 28th discussion draft.
It is believed that the Mohegan Tribe follows the MICS although the Tribe requests exceptions to these internal controls.
An example of the MICS surveillance checklist can be found at: http://www.nigc.gov/LinkClick.aspx?link=NIGC+Uploads%2fMICS%2fMICSchecklist%2fauditing%2fSurveillance-A+542.23.doc&tabid=241&mid=887
The U.S. Congress has approved a bill championed by U.S. Senator Byron Dorgan (D-ND) to honor the contributions of Native Americans to U.S. history. The House of Representatives passed the bill Tuesday, which was previously approved by the Senate in July. Dorgan, chairman of the Senate Indian Affairs Committee, sponsored a similar companion bill in the Senate.
This legislation, known as the Native American $1 Coin Act of 2007, H.R. 2358, would issue a coin each year with a new design honoring a different Native American individual or contribution, while keeping the image of Sakakawea, who is currently on the dollar coin, on the front of the coin.
“Sakakawea, who helped guide Lewis and Clark on their expedition through the American West, is the only Native American currently on a U.S. coin, and this bill will improve the design, marketing and distribution of the current dollar coin,” said Dorgan. “We are now one step closer to issuing these special Native American coins to pay tribute to the first Americans.”
The bill was introduced by Congressman Dale E. Kildee (D-MI), co-chairman of the Congressional Native American Caucus, in the House of Representatives.
“This bill will honor the strength and wisdom of Indian country by authorizing the Secretary of Treasury to mint and issue coins that commemorate the outstanding contributions of Native Americans,” said Congressman Dale E. Kildee. “The designs of this coin will take the American people through a journey of the different experiences of Native peoples by exposing them to their unique histories while preserving the memory of Sacagawea.”
The legislation would amend the Presidential $1 Coin Act to issue a new coin design each year beginning in 2009 for the duration of the Presidential $1 Coin Act. The bill would improve the circulation and marketing of the current Sakakawea dollar coin. Each coin’s new image honoring a Native American individual or contribution would be chosen by the Secretary of the Treasury in consultation with the Senate Indian Affairs Committee, the Congressional Native American Caucus and the National Congress of American Indians.
The bill now goes to President Bush for his approval.
Wednesday, September 5, 2007
The Mohegan Tribe was asked by Capital Play, an Australian group, to participate in their bid for that franchise but was eliminated from consideration today as well as two other firms who submitted bids.
The state legislature must approve any firm awarded the franchise, which begins January 1st.
The Tribe may be out of the running in New York but will soon learn more about their future in Massachusetts. Governor Deval Patrick stated that he is about two weeks away from making any decision regarding casino gambling in that state.
In other regional gaming news, the owners of Rhode Island's Lincoln Park have asked permission for that facility to be open 24 hours.
Tuesday, September 4, 2007
New York Racing Association (NYRA) is now running the racetracks in a contract that is set to expire at the end of December. The other two firms are Excelsior Racing and Empire Racing.
In 2006 and part of 2007, it was revealed that these four firms have spent over $2 million in campaign contributions and lobbying efforts. Governor Spitzer was the major benefactor, receiving $632,000 in campaign contributions from the companies bidding on the racetracks.
Excelsior Racing alone paid $403,579 in campaign contributions to the governor. Capital Play CEO Karl O’Farrell was reported saying that he’s concerned that other firms spent two to three times more than his firm in contributions and lobbying.
The state legislature must approve the governor’s recommendation, which may not be an easy task considering recent tension between the governor and the state’s senate majority leader Joseph Bruno.
Check the "In The News" section of the Feather News on Tuesday for other news updates covering the governor's announcement.
Monday, September 3, 2007
Seventeen tribal members have signed up for the workshop and three open slots remain. The four-hour classes will begin at 8:30 AM and will be held on Tuesdays. The first four weeks will be held in the classroom and the last four sessions will be in the field. The first class will be in the tribal meeting room.
After hearing that news, the Tribe did not investigate the idea any further. “The plan clearly appears to be like a form of extortion,” said then-Mohegan tribal chairman Mark Brown.
Four years later, the state of Massachusetts could finally be on the verge of approving casino gambling and the Tribe finds itself scrambling in an effort to cover the potential loss of revenues. The Mashantucket Pequot Nation reports that 35% of its customers come from Massachusetts while the Mohegans say about half that many customers from Massachusetts visit its casino.
Current Massachusetts Governor Deval Patrick of Massachusetts is expected to announce in September what form casino gambling may take in that state and which groups will be eligible to run the casinos. Last week, the Tribe made public its vision of a $1 billion casino in Massachusetts but it is not clear if the Tribe is under serious consideration.
The position of corresponding secretary, currently held by Roberta Harris-Payne who was not re-elected in August, will have to be filled. Could September also be the last month of Bruce Bozsum’s term as chair of the tribal council? Two new tribal councilors have been elected since the tribal council election in the summer of 2005, when the chairperson and the other officer positions were last selected by their fellow councilors.
Since then, Thayne Hutchins replaced Roberta Harris-Payne and Cheryl Todd replaced Roland Harris on the tribal council.
It has been suggested that alleged irregularities in bid practices that resulted in Bozsum’s brother Mike receiving a large casino contract, among other reasons, could result in the selection of a new chairperson.
The Tribe’s Constitution doesn’t forbid the election of a slate of new officers although last year the Council of Elders chose not to select new officers among those councilors already holding those slots for the first two years of their four-year terms.
Friday, August 31, 2007
Thursday, August 30, 2007
National Indian Gaming Association Chairman Ernest L.Stevens, Jr. and other invited guests honored the Chief and his commitment to Indian Country at his home on Wednesday. Stevens, a member of the Oneida Nation of Wisconsin, presented the Chief with a headdress and a ceremonial shirt.
Tuesday, August 28, 2007
Massachussets Governor Patrick's office denied rumors that he has already decided to allow casino gambling in the state. "There's no truth to this," Patrick's press secretary said yesterday. "The governor has made no decision for or against gaming, and the governor will continue his deliberations until he makes a decision in the coming weeks. It's going to be soon."
Meanwhile, New York Governor Eliot Spitzer said in a news conference on Saturday that a decision on which company will be awarded the franchise to run the Aqueduct, Saratoga and Belmont racetracks may be made after Labor Day. “We're going to try very hard to stick to the Sept. 4 deadline, but I think the thing to keep in mind is that a legislative enactment is required,” Spitzer said. “Sept. 4 will not be a moment when I simply say, ‘This is the answer.’”
Casinos in Massachussets will impact the tribal casinos in Connecticut. The Mashantuckets report that 35% of its casino patrons come from Massachussets while the Sun casino say their Massachussets customers are about half that of those visiting Foxwoods.
The Tribe was asked by Capital Play to be part of a proposal involved in running the New York racetracks.
Related article on New York racetrack bids can be found at: http://feathernews.blogspot.com/2007/07/tribe-to-bid-on-new-york-racetracks.html)
Tuesday, August 14, 2007
The Tribe does not report on the profit or loss from the Pocono Downs as a unit. However, the Tribe’s financial report shows “income from operations” for Pocono Downs of $6.5 million, a figure that does not take into account interest expense on the debt it took out to purchase and improve the facility. Also not deducted are its share of some operating expenses, such as the corporate department expenses (three-month total cost of $3.2 million) and administration and advertising expenses. Once these expenses are taken into account, then the Pocono Downs is certainly generating losses.
Even as the Pocono Downs’ losses accumulate, the tribal government reports to its membership that the Pocono Downs is “very successful.” Based on public statements made last year in an effort to clarify tax obligations to Plains Township, the Tribe inferred that its forecasted revenues were nearly half of the revenues it has actually experienced since the facility opened. In that sense, the facility is exceeding expectations. But it is still losing money.
A second casino in the Pocono Mountains is expected to open this fall and may draw customers away from the Pocono Downs, further increasing losses. Mount Airy Casino is about 20 miles southeast of the Pocono Downs, in the resort location of Mount Pocono. The Mount Airy Casino is scheduled to open on October 15th and will initially include 2,500 slot machines (twice that of Pocono Downs) and a 188-room hotel in addition to restaurants, bars and a golf course. The website for the Mt. Airy casino is www.mountairycasino.com.
It is not known what effect this new casino will have on the Pocono Downs, however it may result in yet higher losses.
Last summer, Penn National – the company that sold Pocono Downs to the Tribe, agreed to pay the Tribe $30 million over five years which, in part, released Penn National from obligations related to environmental issues. It now appears that the Tribe may have to spend $30 million more than anticipated for remediating the environmental problems at the Pocono Downs site, which would “cancel out” Penn National’s payments to the Tribe.
The $180 million expansion at Pocono Downs is scheduled to open in the summer of 2008. The expansion will add 2,500 slot machines, restaurants, bars and retail stores.