This installment of The Tribes In The Media is a Boston Globe article outlining reports that the Mashpee Wampanoag Tribe of Massachusetts has switched investors, changing from principal investors Sol Kerzner and Len Wolman and moving to new investors - the Malaysian group that financed Foxwoods at its inception.
Wampanoag cut ties with casino investors
Now in negotiations with Malaysian firm
By Christine Legere
The Boston Globe
November 30, 2009
The Mashpee Wampanoag tribe is dissolving its partnership with two investors to develop a Middleborough casino and making a new start with an international investment group that boasts a strong track record for building successful gambling resorts.
New investors could put the project on steadier footing at a time when gaming is likely to get its most favorable airing yet on Beacon Hill early next year. But the tribe faces a number of obstacles, including the possibility that the state Legislature may legalize expanded gambling next spring, giving locations like Suffolk Downs a jump on Middleborough.
Wampanoag Tribal Council vice chairman Aaron Tobey said yesterday that investors Sol Kerzner and Len Wolman have agreed in principle to bow out of the project. The pair had been backing the tribe for more than two years, after striking an agreement with former Tribal Council chairman Glenn Marshall. Marshall was convicted of fraud and embezzlement and is currently serving a 3 1/2-year prison term.
A new slate of Tribal Council members refused to reaffirm their agreement with Wolman and Kerzner last spring, saying it was unfair to the Wampanoag tribe. The investors subsequently ceased to make agreed-upon payments to the tribe - a sign the rela tionship was unraveling.
The 500-acre target site in Middleborough will be turned over to the tribe under the terms of the breakup. “The tribe is turning the page and moving forward with investors who are committed to our goals,’’ Tobey said.
The tribe said yesterday its leaders are negotiating an agreement for a “world class’’ resort-style gambling facility with Arkana Limited, a wholly-owned affiliate of Malaysian investment group Kien Huat.
Dennis Whittlesey, the Washington lawyer who helped Middleborough craft its multimillion-dollar casino agreement with the Wampanoag tribe, said the change in the investment team should bode well. “They have a lot of money and they are experienced in getting projects done,’’ Whittlesey said of the Malaysian group. “Depending on the terms of the deal, this could be a very positive development.’’
In the United States, Kien Huat affiliates financed the startups of Foxwoods Resort and Casino in Connecticut in 1992 and the Seneca Niagara Casino in New York in 2002. Worldwide, Kien Huat affiliates maintain substantial interests in a group of companies actively involved in gaming, leisure, cruise, power generation, plantations, property development, biotechnology, and oil and gas.
Kerzner and Wolman, meanwhile, recently filed for bankruptcy for their jointly owned Twin Rivers casino in Rhode Island.
“I suspect the Malaysian group saw a good opportunity with the Wampanoag,’’ said casino specialist Clyde Barrow, a professor at the University of Massachusetts in Dartmouth’s Center for Policy Analysis. “And those investors are very successful with casinos.’’ But Barrow said the tribe faces other obstacles. “Unless they are willing to do some type of arrangement with the state, I think you’ll see other Massachusetts casinos open three to five years before a tribal casino,’’ he said.
Tribal leaders have no plans to meet with Governor Deval Patrick to discuss how the tribe’s proposal fits into the consideration for expanded gaming in Massachusetts, Tobey said.
Rev. Richard McGowan, a Boston College economics professor who studies gambling, said the switch in investors makes the tribe’s position a little more solid.
“It puts them in a better position, but there are still a lot of hurdles,’’ McGowan said. “I don’t think the governor is going to let the tribe take over a casino at a racetrack. And if the Legislature allows casino gambling at places like Suffolk Downs and Wonderland, I don’t see how a casino in Middleborough is ever going to compete.’’
One hurdle the tribe faces could be removed in the coming months. A recent Supreme Court ruling bars the US Department of the Interior from placing land into trust for tribes recognized after 1934, which has stalled the Mashpee Wampanoag’s application to put the Middleborough casino site into trust. “In five or six months, I expect to see legislation correcting that decision,’’ Whittlesey said.
Middleborough Selectwoman Marsha Brunelle said she was unaware of the tribe’s tentative agreement with the new investors. But she maintained it is not likely to have any impact on the town’s deal. “Our agreement is with the tribe,’’ she said. “If they go with different investors, that’s up to them.’’
Seasonal Closing - Because the Mashantucket Pequot Museum and Research Center is closing seasonally this year, the Research Library, the Children’s Library, and Archives & Sp...
4 years ago