Foxwoods discussing bankruptcy

(CNN 9/1/09) ) MASHANTUCKET, Conn. -- The world’s largest Indian gaming casino is juggling a known debt of $1.4 billion. The Mashantucket Pequot Tribal Nation has a loan payment due Tuesday and members of the tribe met Monday to discuss the situation.

Foxwoods Resort Casino is one of the largest casino destinations in the world and is owned by the Mahantucket Pequot Tribe and partners with MGM in the MGM Grand Casino on the sprawling reservation in Ledyard.

The downturn in the economy has had a tremendous impact on the gaming industry. In July, the casino said slot revenue dropped 13 percent compared to a year ago. Tribal members met in closed door meetings Monday as attorneys, communication specialists and financial experts worked on a debt restructuring plan with creditors.

“We still have a steady flow that comes regularly, but as far as many buses coming through here, there’s not,” said employee Teresa Ellis.
According to one ratings expert in New York, tribal casinos can’t do a debt for equity swap. They can’t raise cash by selling off assets on tribal land to repay creditors.

“Across the board, anyone who invests in tribal debt, banks and bonds, the whole financial community is looking at how this plays out,” said Megan Neuburger, analyst at Fitch Ratings.

Last week Standard and Poor cut its Mashantucket rating and placed the tribe’s debt on credit watch.

No tribal casino has tested bankruptcy laws.

Last week, the chairman of the tribe, Michael Thomas, reportedly indicated that the tribal government would be paid before bankers or bondholders.

Last week, the chairman of the tribe, Michael Thomas, reportedly indicated that the tribal government would be paid before bankers or bondholders.

Paid with what?? this action threat will result in the end of ANY type of investment on ANY tribal lands from ANY outside source.

Not to far away from there and enjoy there poker room netime i get the chance... I didnt know about this and hope they come to some kind of solution soon..

I'm assuming debt was accrued from expansion?

They won't be foreclosed on because the property is worthless to outsiders, I'm assuming?

I'm obviously in an assuming mood lol.

Being from overseas I don't really understand how the Indian tribe aspect of this affects things.

But I'd be surprised if the parties that are owed money won't be willing to negotiate a payment plan to keep the place open. I mean it's a casino, and a large successful one at that. It'll go back to making money eventually and everybody will get paid unless the management is grossly, grossly incompetent.

ill go to foxwoods and lose a few Million to help them out,,lol buck

Indian tribes are self-goverened (kinda). The casinos are there because the federal goverment allows it-not the states they are in. They can not just sell the casino-the tribes must own it. Yes-they are allowed partners to build, run it but the tribe is still the owner. This is why they cannot do a debt for equity swap.

Also, not only did the economy hurt them but also the state of PA just allowed slots. This has not only hurt them but also AC.

hey buck y dont u come over to england n loose a few million to me 1st?

ill get a few beers in and a BBQ on the go. Make u feel riiiiiiight at home lol.

LOL,, actually today my son & his wife went to foxwoods, guess its his B-Day present from her, hes not really a gambler, so he might lose $50. or so bucks, and she plays bingo there,, maybe they`ll get lucky today,, buck

I know a good many 'poker players' who play bingo and win.

That's unfortunate to hear. I used to go there all the time when I lived in the area. To those who haven't been, it's a very unique experience.

However, I can understand their plight. When they first opened, they were basically the only casino outside of Vegas or Atlantic City. Mohegan Sun soon followed, and then casinos popped up all over the place. It looks like they may finally be making a casino legal here in Cleveland. But, all the gambling money going in so many different directions is going to have an effect on those who were there in the beginning.

I'll definitely make sure to make my donation to Foxwoods the next time I'm up in the area.

I doubt they will close. Like Clientdiver said this is just so they can get out of debt. Like other companies have done in the past someone will bail them out.

Unfortunately this was likely to occur upon the largest casino on the U.S. Eastern border. Mohegan Sun is but 1/4 to 1/3 the size and has no problems with Operations Cost. No one could have predicted the up rise of a recession/depression to swoop up U.S. economy henceforth the result of the accumulated debt to Foxwoods. It would be a shame to see this castle crumble.

Does anyone have an update on foxwoods situation? These post are over a year ago and foxwoods is still around so i guess they are doing ok?

I dont know how I got suckered into the year old thread thing. This was right on the front page today????

^^^Lol me too.
I actually didn't catch it when I read the thread earlier, so I thought there was more breaking news, ffs.

So Ranny would assume that something got taken care of.

Foxwoods and Mohegan Sun are both local for me. The one thing I can add is that both my email and snail mailboxes are seeing a lot of FW and MS action over the last few weeks.

There also seems to be some confusion at FW. First they're offering to redeem points at $1 each, which is what they're worth at the restaurants and stores. They were going to do this on two consecutive Saturdays. Then another notice came saying it's "postponed", and that they're going to do it for Saturdays (I think) in October but for only $.50 each. It doesn't sound like they know what they are doing, or, maybe it's a sign of internal strife.

I don't see how they can possibly close. If they do, it's going to become virtually impossible for tribes to get outside money unless it's backed up with off-reservation assets.

This is an article I saw recently that explains the situation and gives some history. It spans three pages.

http://www.boston.com/business/artic...rtunes_linked/

Joe Slick's article is also a year old, but here's a link to a very recent article (9/17/2010) about the tribe's problem....

http://blogs.wpri.com/2010/09/17/why...s-running-out/

Here's another current article on the effects of continued gaming/gambling growth...

http://www.boston.com/bostonglobe/ed...st_easy_money/

None of these articles or the discussion here take into account the overall effect of...

1. internet gambling/gaming

2. casino/resort growth outside the U.S.

Just my opinion, but I foresee huge problems for the gaming and casino industry in the near future.

If you follow the reports and details, the situation with the Indian casinos is quite different and a 'bailout' will not be a simple fix. The Feds and the Indians have long ago agreed (under Federal law) that the Indian lands and property are those of a sovereign nation. Foxwoods has been considering paying the Indians their 'distribution payments' and NOT paying their lenders or loans. Who is going to bail THAT out ... ???

well go there once a month or so
and have seen the # of people dwindle a little but dont see them closing down . the economy slow down hurts but thats everywhere think they got into expansion mode too much which overextended what was comin in .

Nick, sorry about the old link. I did really see something new and pertinent a couple of weeks ago on Boston.com but had trouble finding it the other day. I saw September 13 and missed the 2009. If I find the right one I'll post the link. It was actually pretty interesting.

There was a very good article in either the wall street journal or ny times about a month ago. It went into detail about the situation. Read it at the library and can remember which paper it was in and can't find it online anywhere. I'll look again.

here's a good link

http://online.wsj.com/article/SB1000...022442270.html

Here's another link with the same story but it's a little longer and has pictures for those who can't read.

http://online.wsj.com/article/SB1000...WhatsNewsThird

so whats going to happen to the wpt if they end up going in bankruptcy?

Thank you for finding the second article. That's the one I saw and was attempting to post here.

WSOP is a brand that survived being separated from Binions. Along the same lines, I suspect that the WPT brand will outlive the entity that currently owns it. Somebody will find a way to make it pay off.