- Home
- Premium Memberships
- Lottery Results
- Forums
- Predictions
- Lottery Post Videos
- News
- Search Drawings
- Search Lottery Post
- Lottery Systems
- Lottery Charts
- Lottery Wheels
- Worldwide Jackpots
- Quick Picks
- On This Day in History
- Blogs
- Online Games
- Premium Features
- Contact Us
- Whitelist Lottery Post
- Rules
- Lottery Book Store
- Lottery Post Gift Shop
The time is now 11:13 pm
You last visited
April 23, 2024, 8:31 pm
All times shown are
Eastern Time (GMT-5:00)
TRIBAL CASINOS VERSUS LAS VEGAS TYPE CASINOS? Do you have better luck at either one?Prev TopicNext Topic
-
Slots and Keno..at the Casino...Keep me happy....and not so Mean-o.
-
-
Slots and Keno..at the Casino...Keep me happy....and not so Mean-o.
-
WHOLE NEW BALLGAME TRIBAL Casino Restructuring Report by Global Gaming
For those interested in the upcoming changes - very detailed report
Eddessa_Knight
A WHOLE NEW BALLGAME Why tribal casino restructurings are changing quickly BYALEX CALDERONE, TERENCE M. DUNLEAVYAND RANDALLA.FINE www.ggbmagazine.com • August 2010 19 actions which may amount to “management” of such casinos, even if such actions are permitted by agreement of parties, unless such agreement has been approved by the chairman of the National Indian Gaming Commission. Creditors seeking to “manage” operations of a tribal casino, upon default or otherwise, may ultimately find themselves with no remedies if their agreements with the tribe are subsequently determined to be unapproved management contracts. The difficulties and limitations encountered by lenders and other creditors of troubled tribal casinos are highlighted by the United States District Court for the Western District of Wisconsin’s recent opinion in Wells Fargo Bank, N.A. v. Lake of the Torches Economic Development Corporation. In January 2008, the casino issued $50 million in bonds and entered into a trust indenture with its lenders. While the documents were submitted to the NIGC for approval prior to their execution, the casino’s counsel issued a letter opining that such documents were neither a “management contract” nor an agreement that is a “collateral agreement” to a management contract. The security provided for the bonds included, among other things, all of the casino’s interest in the “gross revenues” of the property, its equipment, and a variety of other items. In November 2009, the lenders received a request for money that they considered suspicious, and after allegedly failing to receive a substantive response to its request, the lender said that the principal and interest of the bonds were immediately due. Thereafter, the lender filed a lawsuit and sought the appointment of a receiver. The District Court denied the motion to appoint a receiver and dismissed the lawsuit on the grounds that the trust indenture was a “management contract” which lacked the required approval of the NICG chairman. The District Court based its determination on regulations which state a “necessary condition for a management contract is that it grant to a party other than the tribe some authority with regard to a gaming operation.” The District Court determined the trust indenture was a management contract based on provisions that included restrictions on the property’s ability to spend capital, the forced hiring of a “management consultant” if results did not meet expectations, the inability of the tribe to fire senior executives without lender approval, and several other issues. Additionally, the District Court determined that it lacked jurisdiction over the casino because, in the absence of a clear waiver, the lawsuit was barred by the tribe’s sovereign immunity. While the trust indenture contained a provision whereby the corporation expressly waived its sovereign immunity with respect to suits to enforce the corporation’s obligations, the District Court found that “even if the waiver provision could be saved, the remainder of the trust indenture is void, so there would be no remaining obligations to enforce under the contract.” The lenders filed a motion to amend and alter the District Court’s order or, in the alternative, for leave to file an amended complaint. The court rejected the lenders’ arguments that the main purpose of the trust indenture was to obtain repayment of the bonds, not the management of the tribal casino. The District Court concluded that even if the objectionable management provisions could be removed, the remainder of the trust indenture would be null and void because the entire document constituted an unapproved management contract, leaving nothing to enforce. On April 25, Wells Fargo filed notice that it would appeal the court’s decision. While it is unclear whether other courts will adopt the District Court’s No one ever thought the gaming industry would run into trouble. The restrictions on commercial licenses to a dozen states and the limitations in many others to tribal lands led to almost 100 years of consistent revenue growth, in good times or bad. It seemed as though the demand for gaming would forever outstrip supply, and whenever anyone believes that the good times can never come to an end, unexpected challenges can ensue. This unbridled optimism about gaming’s future led to unprecedented levels of debt being raised in both commercial and tribal gaming. Yet as the recession hit the industry and for the first time ever revenues failed to meet expectations, lenders and casino owners were forced to work, either collaboratively or legally, to restructure and resolve financial issues. As these issues make their way to Indian Country, it has become clear that, as in many aspects of casino operations, the methods used by commercial casinos are different than those for tribal casinos. In this article, three disparate experts—a financial consultant who specializes in casino restructurings, a gaming operator who has improved the operating performance of dozens of distressed properties, and an attorney who specializes in tribal gaming law—have come together to lay out a comprehensive guide to what makes tribal restructurings different, and a game plan for how to proceed. THE COURTS ARE NOT THE ANSWER Absent compliance with tribal and federal regulatory procedures at the “front end” of the transaction, creditors of troubled tribal casinos and other tribal entities may lack the ability to work out the loan or investment at the “back end” of the transaction. For the same reason, it is unclear how, if at all, non-tribal (i.e., federal and state) laws apply to tribal entities. This leaves creditors of troubled tribal casinos in uncharted territory, with limited recourse, and may affect the ability of tribal entities to secure financing for future projects. In a typical commercial transaction, secured creditors of a defaulting or troubled entity may seek recourse in a number of ways, including foreclosure on the defaulting entity’s assets which are subject to such creditor’s security interests; or placing the defaulting entity into a receivership or bankruptcy. The sovereign status of tribal nations and their lands limits the ability of non-tribal creditors to recover from troubled tribal casinos. As a sovereign nation, a tribal entity (including tribal casinos) may only be sued where Congress has authorized the suit or such tribal entity has waived its immunity. There also exists much uncertainty as to how, if at all, federal bankruptcy laws apply to tribal entities. No tribal entity has tested the application of federal bankruptcy laws. However, many legal experts believe that tribal entities, as sovereign nations, would likely be precluded from seeking relief under the federal bankruptcy laws. Tribal land and the tribal businesses conducted on them, including tribal casinos, may not be sold, taxed or encumbered. Indeed, federal and tribal regulations require that tribal entities retain the sole proprietary interest in the tribal casino. As a result, tribal casinos cannot agree to a debt-for-equity swap, and cannot raise cash by selling off tribal land or assets to repay creditors. For the same reason, creditors are prohibited from taking over casino operations or foreclosing on tribal land or tribal assets. The recourse available to creditors of troubled tribal casinos is also limited by provisions of the Indian Gaming Regulatory Act. For example, creditors of troubled tribal casinos are prohibited from retaining all distributions from tribal casino operations upon a default because the IGRA requires that at least a portion of the cash flow from gaming operations be used to support tribal government operations. Similarly, creditors of troubled tribal casinos must be cautious in taking any
