"Casinos team up for ad campaign; Connecticut resorts take on Atlantic City" by Katie Johnston Chase, Globe Staff | July 8, 2009
Business has dropped at both Foxwoods and Mohegan Sun....
But both reported that May was their best month of 2009....
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Couldn't have been that good:
"Foxwoods is cutting 67 employees" by Katie Johnston Chase, Globe Staff | July 29, 2009
Citing the need to become more “fluid, agile, and efficient,’’ Foxwoods Resort Casino is laying off 67 employees, Mashantucket Pequot Gaming Enterprises said yesterday. The number represents less than 1 percent of the casino’s workforce and will affect mainly management employees in several departments.
“We’ve been operating under a business model that was established more than a decade ago - when circumstances were markedly different - so these changes were necessary in several departments,’’ Robert Victoria, senior vice president of consumer marketing, said in statement.
Slot revenue for June was down 9 percent from last June at Foxwoods, according to the Connecticut Division of Special Revenue, and down nearly 7 percent in the fiscal year that ended in June compared to the year before. The layoffs were announced to employees yesterday and will be made by the end of the week.
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Meanwhile, they are in the position of their patrons:
"Foxwoods casino owner is seeking to restructure its debt" by Beth Jinks and Jonathan Keehner, Bloomberg News | August 27, 2009
NEW YORK - Mashantucket Western Pequot Tribal Nation, owner of the Foxwoods Resort Casino, is seeking to restructure at least $1.45 billion in debt as the recession and competition cut into winnings....
Foxwoods, one of the largest casinos in the United States by gambling space, may become the biggest tribal casino company to default, and its status on sovereign tribal land complicates negotiations. The operation has lost business to the recession and competition from new casinos and racetracks with slot machine-style video-lottery terminals in nearby states....
Yup, the answer to all your prayers, Massachusetts.
"Foxwoods’ owners reach forbearance deal with lenders" by Beth Jinks, Bloomberg News | October 27, 2009
NEW YORK - The Foxwoods Resort Casino’s tribal owners in southeastern Connecticut entered into a forbearance agreement with senior lenders that runs until Jan. 20.
The casino’s owner, the Mashantucket Western Pequot Tribal Nation, has been working with lenders for weeks to restructure the debt, the tribe said yesterday. Under a forbearance, creditors agree not to pursue default rights if payments aren’t made or loan conditions are breached.
“The tribal council remains committed to working with its lenders to reach consensual resolutions,’’ the council said. The casino has about $2.5 billion of debt....
They added another billion in two months time?
The Mashantuckets placed chairman Michael Thomas, who is seeking reelection as council chairman, told tribe members they would be paid before banks or bondholders in a financial restructuring, The Day newspaper of New London, Conn., reported Aug. 26....
Oh, that is going to piss some people off.
The council backed away from Thomas’s comments on Aug. 28, when a spokesman said the tribe “will be pursuing a mutually beneficial resolution with its banks and bondholders.’’
I told you it ticked someone off.
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Yup, gotta please those bankers!
"Casino makes partial debt payment" by Associated Press | November 18, 2009
NEW HAVEN - Foxwoods Resort Casino, one of the world’s largest, has failed to make a full payment on its debt, leading to a default and another credit-rating downgrade.
The Mashantucket Pequot Tribal Nation, which owns Foxwoods, said it has paid $14.2 million of the $21.25 million semiannual interest payment that was due Monday on $500 million in debt notes. The tribe does not anticipate paying the balance within 30 days, resulting in a default.
The tribe, which has been seeking to restructure billions of dollars in debt, said its efforts are “separate and distinct’’ from operations at Foxwoods and will not affect customers, employees, suppliers, or business partners.
Foxwoods - it has 10,000 employees and 7,000 slot and video poker machines and made more than $700 million in profit last year - is the most high-profile example of a tribe’s defaulting on debt, said Megan Neuburger, director at Fitch Ratings.
And they can't make a $21 million dollar interest payment?
She said investors have long wondered what would happen if a tribe, which has national sovereignty, defaults.
“This is definitely a precedent-setting situation,’’ Neuburger said. “Certainly everyone in the investing community will be watching this to see what the outcome is.’’
Standard & Poor’s lowered its credit rating to D, its lowest rating. Lenders will now be more hesitant to make loans to Foxwoods, said Craig Parmelee, S&P’s managing director.
“The availability and cost of financing for Foxwoods in the future is in question,’’ he said.--more--"
Yup, the WONDERRRRR of it ALLLLLL!!!!
"The wonder, and the fall; A source of pride, plenty for Pequots in boom times, struggling Foxwoods now a looming threat to tribe" by Jenn Abelson, Globe Staff | September 13, 2009
LEDYARD, Conn. - Foxwoods was the world’s largest and most successful casino resort, an entertainment mecca that racked up more than $1 billion annually.
The fortune yielded nice homes, fancy cars, college degrees, community centers for tribal members, and a massive museum of native history. With the money came self-sufficient communities - and thus preserve their native unity.
Try doing that if you are white and see what the reaction you get.
But now Foxwoods faces financial problems that threaten to tear the tribe apart. Crushed by more than $2 billion in debt from exorbitant expansion, the resort is fighting an uphill battle against sliding revenues because of the economy and increased competition from newer venues.
Place your bets, place your bets!
More than 700 layoffs in the last year, or about 6 percent of the workforce, failed to stem the bleeding as slot revenues at the casino continued to drop, plunging 13 percent in July to $63.2 million compared with a year ago.
Loser!
Maybe people finally wised up.
Foxwoods - once the symbol of the Pequots’ greatest achievement - has become the subject of nationwide speculation that the largest Native American casino could fail....
But bring 'em on, 'eh, Massachusetts?
Debbie Frankovitch, 55, a Pequot who has lived on the reservation her entire life and used to work as a tribal clerk: “Now, the casino is a big embarrassment. It’s just a lot of greed. People wanted more and more. It’s like a nightmare. It’s a shame it’s come to this.’’
How do you like the GLIMPSE of the FUTURE, Massachusetts?
The Pequots council chairman reportedly promised to preserve payouts for tribal members before paying off lenders. That set off jitters among creditors, and the fallout has already spread to other tribes. Their bonds are trading at lower prices following the Foxwoods debacle, sparking worries that native casinos such as Mohegan Sun will find it more expensive to borrow money. The tumult threatens to unravel years of unfettered success and tribal security, and dampen efforts to expand native gaming to other states, including Massachusetts.
Yup, on the REALLY IMPORTANT things we are always last in line, not a leader.
Hey, at least we still have same-sex marriage!!
Pequot leaders declined interviews about the crisis they face. In a statement, the council said: “We remain in compliance with our covenants and are current with regard to our debt obligations....’’
*****
Like so many other industries, casinos rode the wave of easy credit to success in the years leading up to the recession, and Foxwoods was no exception. The Pequots, who had to go to Malaysia to fund the initial $60 million casino because no one else would lend to them, soon had banks lining up with loan offers as Foxwoods raked in customers - and their cash. The tribe quickly expanded the resort, adding hotels, restaurants, and shops to the complex, which now stands at 4.7 million square feet, nearly 20 times its original size. The Pequots also spent big to acquire nearby businesses and invest in other industries, such as shipbuilding -an expensive effort that later flopped. The casino operation was also a major boon to Connecticut under an arrangement that provides 25 percent of gross slot revenues to the state or a minimum of $100 million annually....
As competition intensified from nearby casinos, such as Mohegan Sun in Uncasville and Twin River in Rhode Island, Foxwoods embarked on a $700 million project to create MGM Grand at Foxwoods, a partnership with one of the premier Las Vegas operators that was intended to redefine Foxwoods’ reputation as a destination for high-end rollers and star talent.
I've been down there once; I was not impressed at all.
As part of a deal announced in 2006, MGM Mirage promised to provide up to $200 million in loans to fund joint casino expansions in new cities, and had scoured for locations in Kansas and Massachusetts.
But by the time the MGM Grand at Foxwoods debuted in May 2008, the recession was well underway, and gambling receipts were dipping sharply nationwide. Plans to export the Pequots’ success to other states were scrapped, and the millions of dollars that Foxwoods expected from new ventures with MGM never materialized as the Las Vegas giant also began to teeter under the recession. Now, the shimmering tower stands as a symbol of excess, with unbooked rooms, empty stores, and a sparsely populated gaming floor. One measure of the slide: Even with the new slot machines at MGM Grand, Foxwoods’ annual contributions to the state have dropped 14 percent since the high of $205 million in 2005....
Yeah, it is all the recession's fault, pffft!
So, dealing with the financial troubles at Foxwoods isn’t just about solving a business problem at a casino. It’s about finding a way to salvage the economic engine that sustains the Pequot nation. And if the Pequots - as one tribal leader suggested - decide to pay members before paying their bills, it could create serious problems for lenders. Because the casino is on reservation land that is considered, under federal law, part of a sovereign nation, lenders cannot turn to the typical remedies in the event of a default, such as foreclosing on Foxwoods and taking ownership.
I would like to declare my property a sovereign nation, wouldn't you, American?
The Pequots have hired a financial firm to try to restructure their debt by cutting interest rates, extending due dates, and exploring whether a bankruptcy is even possible, according to the adviser.
Clyde Barrow, director of the Center for Policy Analysis at the University of Massachusetts at Dartmouth, said Foxwoods has been beset by various problems, and said he believes the casino’s lenders were not fully aware of the magnitude of debt that Foxwoods was accumulating. Other casinos, such as Mohegan Sun, have fared better because they suspended expansion plans when the economy crumbled.
Gaming analysts and casino operators say the ongoing struggles at Foxwoods and the threat of default could have a chilling effect on the entire industry....
Well, apparently not since we are piling ahead pell-mell with them.
Across Foxwoods and the surrounding reservation, the anxiety and frustration are palpable. Nervous employees try to untangle rumors and express worries about job security. And some tribal members have talked of clashes within their own families over the right course of action....
So much for that tribal unity.
Was the gambling money worth it?
Charles Rogers, a Pequot who now lives in Groton, said the tribe looked at Foxwoods as a bottomless pit of money and it poisoned a community of people who suddenly achieved a lifestyle they had never imagined.
“The casino allowed people to come forward and admit who they are, and it offered a sense of pride and stability. But then it evolved into a sense of entitlement,’’ Rogers said. “This entitlement and one-upmanship and ego is really what’s ruining this tribe and ruining the casino. How much money is enough? At what point do you ask yourself that question? For some people, there’s never enough.’’
Looks like a Jewish influence to me.
Connecticut also looking to add Keno:
"Rell continues bid for Keno; Says Conn. stands to gain $20m" by Susan Haigh, Associated Press | February 8, 2010
HARTFORD - Faced with a nagging budget deficit problem, Governor M. Jodi Rell is gambling again on Keno as a way to raise revenues in Connecticut.
How many times are you told that is not the way to solve your budget woes, America?
The Republican governor proposed allowing Keno - a lottery-type form of gambling, often found in restaurants, bars, and convenience stores - in her new budget as a way to raise $20 million in 2011 and $60 million each year afterward.
This latest push for Keno comes seven months after Rell first suggested Keno, and Attorney General Richard Blumenthal advised the General Assembly to amend the state’s memoranda of understanding with the two federally recognized Indian tribes, whose casinos offer Keno, before embarking on the new game.
If not, Blumenthal said, the state could risk the $400 million that the two tribal casinos provide the state annually in slot machine revenues.
Under the agreements between the state and the two tribes, no other person within Connecticut has the right to operate a “commercial casino game.’’ Blumenthal said state law is unclear whether state-run Keno would be considered a “commercial casino game.’’
Despite that warning, Rell is pushing ahead. Jeffrey Beckham, a spokesman for Rell’s budget office, said Friday the administration believes Keno is consistent with the state’s agreement with the tribes and that the quasi-public Connecticut Lottery Corp. could offer Keno without conflict.
“It is a lottery-type game,’’ said Beckham.
Rell’s budget staff based its revenue estimates on sales figures from Keno revenues in Massachusetts and Rhode Island and then adjusted them to Connecticut’s population....
Keno’s fate in Connecticut, however, will ultimately be decided by the General Assembly, said Robert Genuario, Rell’s budget director. He said if the Legislature prefers another way to balance the budget, Rell would be open to considering it....
Paul Young, executive director of the state’s Division of Special Revenue, which regulates gambling in Connecticut, said he disagrees with Blumenthal and that it is clear Keno is a “lottery game’’ that the state can offer.
“We believe it’s a lottery game, and we believe that the tribes play it as a lottery game and it’s not listed in the compact as a table game, so therefore they are playing it under the lottery authorization,’’ Young said.
Young also said he believes the state lottery can begin offering Keno without any legislative action. It’s expected to take several months to get Keno up and running....
In Connecticut, Keno is seen as a possible way to raise a lot of money at once. It’s been suggested as a new revenue stream that could be borrowed against over the next 10 years, generating $400 million. Total lottery sales in Connecticut in 2008 were nearly $988 million.
They NEVER LEARN, do they?
Yeah, BORROW against so the taxpayers will have to PAY INTEREST on it.
And WHO BENEFITS?
Related: Connecticut Casinos Kill
Literally, readers.
