Debt negotiations going on between the Mashantucket Pequot tribe and its lenders risk changing financial realities for Indian gaming across the nation. That’s the assessment of one expert as the owner of Foxwoods grapples with two billion dollars’ worth of debt. WNPR’s Harriet Jones reports.
The Mashantucket Pequots recently announced that they had reached an agreement with most of their senior lenders for more time to continue restructuring their debt. The new deadline for a deal is now April. The tribe has been struggling with a massive debt load since opening its MGM Grand facility just as the recession began. Attorney Tom Foley, a former vice chairman of the Indian Gaming Commission says the outcome of the tribe’s talks is being closely watched.
“It’s going to affect future financing of other Indian gaming facilities throughout the country, because if there’s more of a risk financing an Indian tribal casino, I think there will be higher percentages on loans the lenders will require to a facility. So any ripple effect out of what might be going on in Connecticut, it affects the whole industry and what it does is just raise the cost of money.”
Lenders cannot insist on a bankruptcy proceeding because the tribe operates the casino in a sovereign nation, and is not subject to bankruptcy laws.
For WNPR, I'm Harriet Jones.