Revenues Down at Foxwoods – What Does That Mean for Gamblers and Bettors?

The Foxwoods Resort Casino in Ledyard, Connecticut is considered one the largest casinos by space in the United States. It is owned by the Mashantucket Western Pequot Tribal Council and it is considering debt reconstruction. This debt reconstruction is due to the newer casinos and racetracks that have recently put in slot machines and video lottery machines in nearby states. They claim this has taken away business from them and they have to find a way to deal with a debt of 2.3 billion dollars.

This casino, at its prime, was extremely popular for horse betting and sports betting. People would come from surrounding states to bet. In 1976 the federal government banned the casino from all betting activities and it seems they haven’t recovered since.

Chairman Michael Thomas told tribe members that they would be paid prior to the banks or bondholders when considering the financial restructuring. Evidentially this left a bad taste in someone’s mouth because Mr. Thomas was placed on administrative leave and is being investigated internally by the tribe. It is feared that lenders may not want to provide loans to American Indian Gaming pursuits if this is the way they will do business.

An interest payment was due Tuesday, September 1, 2009 and so far the tribe does not have anything that is back due.

The Mashantucket Pequot Tribe is partners with MGM and pays MGM for the use of its name. This costs them several million per year and they really don’t get any other benefits except for being able to display the name.

Revenues are down; in fact, in July Foxwoods said the slot revenue was down 13% compared with last year. Regulars still show up at the casino but there aren’t many tour busses coming in anymore. People just don’t seem to have the money to go on gambling excursions like they did before.

The tribe is between a rock and a hard place. Other casinos can do an equity swap to pay off debt. That means they can sell off land assets to repay creditors. American Indian tribes can’t do that because their land is tribal land under treaty and cannot be sold. It is questionable as to whether a tribal casino can declare bankruptcy because it is not considered to be on United States Ground. It is on Tribal land and that is a whole different thing.

MGM Grand at Foxwoods has a Four Diamond award from the Automobile Association (AAA) and has for over seven years. This is a great honor because only 3 percent of hotels that are rated by AAA get the Four Diamond award. This award means the property has exceptional customer satisfaction standards and include extraordinary services to its customers. MGM Grand at Foxwoods has 825 guest rooms and suites and has a 30 story tower that just opened in 2008. There is the casino and a spa as well as several restaurants from casual to high end, the MGM Grand Theater, and retail shopping. The casino has 7200 slots and 380 table games. It is thought that this facility actually did some good in keeping debt for Foxwoods down because it just opened the tower and brought guests that would normally have gone elsewhere in to see it.

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