The Mohegan Tribe of Connecticut -- an investor in the Cowlitz Tribe’s casino proposal for nearly five years -- is reeling under a series of financial challenges.
For the past few quarters, its mother ship, the Mohegan Sun casino in Uncasville, Conn., has experienced significant declines in gambling revenue. In September the Mohegan Tribe put its $734 million casino expansion on hold. In November its credit rating took a hit when Moody’s Investors Service lowered it from Ba2 to B1, a rating indicating securities that “lack characteristics of a desirable investment.”
Then, in early January, the U.S. Department of the Interior rejected a casino proposal from the Mohegan Tribe’s Wisconsin-based partner, the Menominee Tribe. The Menominee and Mohegan tribes had been working together for at least six years in an effort to develop a $1 billion casino at Kenosha, Wis.
The next week, The Day newspaper out of Connecticut reported that Mohegan tribal and casino officials had “presented a sweeping plan to rein in costs in the face of declining casino revenues and dire economic forecasts.” It includes salary cuts for all 9,800 casino employees, suspended 401(k) matches, a reduction in number of employees, reduced casino profit distributions to tribe members and discontinued construction of an $80 million community center.
Despite its troubles at home, the Mohegan Tribe is continuing its uphill battle with the proposed Cowlitz casino and supporting the Menominee Tribe’s plans to fight the federal government for approval of its proposed casino.
Tuesday, January 27, 2009
Wednesday, December 17, 2008
Tribal casinos immune to lawsuits
Imagine you're driving merrily along I-5 when -- crash! -- you get hit by a drunk driver.
You're seriously injured. The other driver admits fault and goes to prison.
Left with staggering medical bills, you sue the business that had served that driver when she was already drunk.
But wait!
She came from a party at the tribal casino. And the 9th U.S. Circuit Court of Appeals recently declared that casinos (and other commercial activities) of tribes are protected from legal action, thanks to sovereign immunity -- unless the tribe has offered a clear waiver or Congress has authorized the suit.
That would be just as true for the proposed Cowlitz-Mohegan-Paskenta casino in Clark County as it is for the Nevada casino absolved of the lawsuit by the 9th Circuit.
See for yourself:
"Court protects Indian casino from lawsuit," Las Vegas Sun (Nov. 14, 2008)
Ruling by the 9th U.S. Circuit Court of Appeals (Nov. 14, 2008)
One thing's certain: The proposed Cowlitz casino is a bad bet for Clark County.
You're seriously injured. The other driver admits fault and goes to prison.
Left with staggering medical bills, you sue the business that had served that driver when she was already drunk.
But wait!
She came from a party at the tribal casino. And the 9th U.S. Circuit Court of Appeals recently declared that casinos (and other commercial activities) of tribes are protected from legal action, thanks to sovereign immunity -- unless the tribe has offered a clear waiver or Congress has authorized the suit.
That would be just as true for the proposed Cowlitz-Mohegan-Paskenta casino in Clark County as it is for the Nevada casino absolved of the lawsuit by the 9th Circuit.
See for yourself:
"Court protects Indian casino from lawsuit," Las Vegas Sun (Nov. 14, 2008)
Ruling by the 9th U.S. Circuit Court of Appeals (Nov. 14, 2008)
One thing's certain: The proposed Cowlitz casino is a bad bet for Clark County.
Saturday, November 29, 2008
Mielke claims Clark County Commission seat
Cowlitz casino opponent Tom Mielke has claimed a seat on the Clark County Board of Commissioners, despite the casino developer’s efforts to keep him out of office.
“In his victory statement, Mielke lambasted Cowlitz Tribe member and would-be casino developer David Barnett of Seattle, who independently spent $76,500 to attack Mielke by mail and telephone in the last four days of the race,” reported The Columbian Nov. 26.“‘The people of Clark County have rejected casino special interests,’ Mielke said.”
The race had been up in the air for a couple of weeks, but late-arriving mail-in ballots tipped the results to Mielke. His election appears to change the board to an anti-casino majority as he joins longtime casino opponent Marc Boldt on the board. Steve Stuart is the third commissioner.
For more on Barnett's efforts, see our earlier blog.
“In his victory statement, Mielke lambasted Cowlitz Tribe member and would-be casino developer David Barnett of Seattle, who independently spent $76,500 to attack Mielke by mail and telephone in the last four days of the race,” reported The Columbian Nov. 26.“‘The people of Clark County have rejected casino special interests,’ Mielke said.”
The race had been up in the air for a couple of weeks, but late-arriving mail-in ballots tipped the results to Mielke. His election appears to change the board to an anti-casino majority as he joins longtime casino opponent Marc Boldt on the board. Steve Stuart is the third commissioner.
For more on Barnett's efforts, see our earlier blog.
Friday, November 28, 2008
‘Casino MOU is Folly,’ declares Columbian
A Nov. 25 editorial in The Columbian dubs the Clark County Board of Commissioners’ current efforts to negotiate a new agreement with the Cowlitz Tribe “folly” and illustrates it with a great metaphor:
When the county passed its resolution opposing the casino in April, it was declining a marriage proposal. To now negotiate a memorandum of understanding (MOU) is like discussing a prenuptial agreement -- for a marriage that will never be.
What the editorial and the article precipitating it fail to explain, however, is that a key decision-maker with the Department of the Interior has said that the absence of a valid Cowlitz Tribe-Clark County MOU “could potentially be a deal breaker for them, yes.” (For more on this, please see "County quietly negotiates with tribe."
The 2004 county-tribe MOU was invalidated in December 2007 for lack of public participation. CARS has long maintained that the best thing for the county to do is nothing. Let the document stay dead. That way there is no mistaking how the county and its citizens feel about this proposed development.
Read the editorial "Casino MOU is Folly."
Read the article "County-tribe casino deal in works."
When the county passed its resolution opposing the casino in April, it was declining a marriage proposal. To now negotiate a memorandum of understanding (MOU) is like discussing a prenuptial agreement -- for a marriage that will never be.
What the editorial and the article precipitating it fail to explain, however, is that a key decision-maker with the Department of the Interior has said that the absence of a valid Cowlitz Tribe-Clark County MOU “could potentially be a deal breaker for them, yes.” (For more on this, please see "County quietly negotiates with tribe."
The 2004 county-tribe MOU was invalidated in December 2007 for lack of public participation. CARS has long maintained that the best thing for the county to do is nothing. Let the document stay dead. That way there is no mistaking how the county and its citizens feel about this proposed development.
Read the editorial "Casino MOU is Folly."
Read the article "County-tribe casino deal in works."
California tribe buys into Cowlitz casino
David Barnett, the Seattle-based developer of the proposed Cowlitz casino, has reportedly sold nearly half his interest in the project to a California Tribe.
According to a story last week in The Columbian, the 240-member Paskenta Band of the Nomlaki Indians, which owns a casino 100 miles north of Sacramento, has joined the Mohegan Tribe of Connecticut to partner with Barnett. According to The Columbian, one unconfirmed report says the California tribe purchased 48 percent of Barnett’s interest.
That would mean Salishan-Mohegan, the partnership originally formed between Barnett and the Mohegan Tribe to develop and manage the casino for seven years, now is owned 57 percent by the Mohegan Tribe, 22.4 percent by Barnett and 20.6 percent by the Paskenta Band of Nomlaki Indians.
CARS has long maintained that this project is being pushed through by interests that have little to do with Clark County or even southwest Washington. Now 77.6 percent of the venture is owned by out-of-state investors.
According to a story last week in The Columbian, the 240-member Paskenta Band of the Nomlaki Indians, which owns a casino 100 miles north of Sacramento, has joined the Mohegan Tribe of Connecticut to partner with Barnett. According to The Columbian, one unconfirmed report says the California tribe purchased 48 percent of Barnett’s interest.
That would mean Salishan-Mohegan, the partnership originally formed between Barnett and the Mohegan Tribe to develop and manage the casino for seven years, now is owned 57 percent by the Mohegan Tribe, 22.4 percent by Barnett and 20.6 percent by the Paskenta Band of Nomlaki Indians.
CARS has long maintained that this project is being pushed through by interests that have little to do with Clark County or even southwest Washington. Now 77.6 percent of the venture is owned by out-of-state investors.
Cowlitz casino investor sees credit rating decline
The Mohegan Tribal Gaming Authority, a partner in developing and managing the proposed Cowlitz casino, saw its credit rating lowered from Ba2 to B1 by Moody’s Investors Service.
The B1 rating indicates securities that Moody’s says “lack characteristics of a desirable investment.”
Last week the Associated Press reported, “Moody’s said negative gaming trends in Connecticut and ‘significant’ dividends paid to the Mohegan Tribe will hamper the company from lowering the debt-to-earnings ratio in the near-term consistent with a ‘Ba2’ rating.”
Read the full article in Forbes magazine.
The B1 rating indicates securities that Moody’s says “lack characteristics of a desirable investment.”
Last week the Associated Press reported, “Moody’s said negative gaming trends in Connecticut and ‘significant’ dividends paid to the Mohegan Tribe will hamper the company from lowering the debt-to-earnings ratio in the near-term consistent with a ‘Ba2’ rating.”
Read the full article in Forbes magazine.
Vancouver vs. NIGC II
The City of Vancouver is doing its part to fight the proposed Cowlitz casino.
Vancouver had filed a lawsuit in March in response to the National Indian Gaming Commission (NIGC) decision that tribal ordinances could replace the Cowlitz Tribe-Clark County memorandum of understanding (MOU). The MOU had been invalidated in December 2007.
In September, the 9th U.S. Circuit Court of Appeals tossed out the city’s lawsuit saying it did not have grounds to challenge the NIGC’s decision.
Earlier this month, the city told the court it was getting back in the ring and contesting the court’s decision.
Why challenge the ordinances?
The tribal ordinances are problematic. In addition to their content being unsatisfactory (as was that of the initial MOU), they are unilateral.
Additionally, they might not be enforceable. Even in his approval letter the NIGC chairman writes, “the issues concerning enforceability are not properly addressed here.” It is possible that new tribal leadership would not have to comply with ordinances written under its predecessors, making it a particularly bad deal for the county.
Read about this latest round in The Columbian.
Vancouver had filed a lawsuit in March in response to the National Indian Gaming Commission (NIGC) decision that tribal ordinances could replace the Cowlitz Tribe-Clark County memorandum of understanding (MOU). The MOU had been invalidated in December 2007.
In September, the 9th U.S. Circuit Court of Appeals tossed out the city’s lawsuit saying it did not have grounds to challenge the NIGC’s decision.
Earlier this month, the city told the court it was getting back in the ring and contesting the court’s decision.
Why challenge the ordinances?
The tribal ordinances are problematic. In addition to their content being unsatisfactory (as was that of the initial MOU), they are unilateral.
Additionally, they might not be enforceable. Even in his approval letter the NIGC chairman writes, “the issues concerning enforceability are not properly addressed here.” It is possible that new tribal leadership would not have to comply with ordinances written under its predecessors, making it a particularly bad deal for the county.
Read about this latest round in The Columbian.
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