Investors get rich off Indian gaming

Rebellion · #1 (**permalink**) 12-17-2007, 04:16 AM

http://www.boston.com/news/local/art..._to_investors/

Quote:

A coterie of casino executives who helped the Mohegan of Connecticut build one of the most successful tribal casinos in the world has been paid $369 million in resort and casino proceeds during the last six years - slightly more than has been received by the entire 1,700-member tribe.

It is the kind of bonanza that was supposed to be prohibited by the federal Indian Gaming Act when it was passed 20 years ago, say some US senators and federal regulators.

But the Mohegan Sun investors - led by Sol Kerzner and Len Wolman - found legal ways around provisions intended to make sure most casino benefits went primarily to tribes. And those loopholes remain open after a massive lobbying blitz by the $25 billion Indian gaming industry.

Since 2001, the industry and its lobbyists have repeatedly defeated efforts to tighten rules and increase transparency. In the industry's latest victory, it crushed an Indian Gaming Act amendment championed in 2006 by Senator John McCain, a Republican of Arizona. McCain's bill would have prevented huge payouts like those received by Kerzner and Wolman. McCain has said the defeat of his bill was a triumph for special interests.

"Their lobbyists are very powerful, and they're pretty hard to fight," McCain said in an interview last month. "I was very disappointed."

That lobbying success now is reverberating in Massachusetts, where Kerzner and Wolman have most recently set their sights on a tract of land in Middleborough. Just six months after McCain's bill was defeated, Kerzner and Wolman signed a deal with the Mashpee Wampanoag tribe to build a $1 billion casino on the rural site.

That contract is subject to the same rules that allowed Kerzner and Wolman to make more money than the Mohegan tribe in recent years. Even Governor Deval Patrick has been unable to find out - despite requests for information - how much Kerzner, Wolman, and other investors in the Middleborough casino negotiations would get in the deal.

"We believe strongly that the financial deal between the tribe and their backers should be made public," said Joseph Landolfi, a spokesman for Patrick, who is interested in courting the developers and tribe if he wins legislative approval of his plan for three state-licensed casinos.

And in case there is any doubt who is behind blocking the legislation to reform the industry and prevent these types of windfalls to those not intended, it would be the Democrats.

http://www.signonsandiego.com/uniont...n14casino.html

Quote:

The House voted 247-171 in favor of the legislation, short of the two-thirds majority needed under a special procedure used to bar amendments to the bill.

The legislation won support from 208 Republicans and 39 Democrats, while 154 Democrats, 16 Republicans and one independent voted against it.

McCain's measure would apply additional restraints to off-reservation proposals than the Pombo bill. But it goes further, giving the National Indian Gaming Commission clear regulatory authority over all Indian casinos and requiring tighter scrutiny of those who contract with gaming tribes.

Like Pombo, McCain also has drawn opposition from those who believe his legislation goes too far or not far enough. Among the senators who have placed holds on it is Dianne Feinstein, D-Calif., who wants language included to block a full-scale casino in the San Francisco suburb of San Pablo

Observers said they weren't sure why a majority of Democrats banded together against the bill, even though it was sponsored by Rep. Nick Rahall II, D-W.Va., the ranking Democrat on the Resources Committee.

Several said election-year politics played a role.

Over the past 16 years, tribal contributions to lawmakers have favored Democrats over Republicans by more than 2-to-1, according to the Center for Responsive Politics.

With deals like this it's no wonder.

justabubba · #2 (**permalink**) 12-17-2007, 05:21 AM

not sure what your problem is with the Indian casinos
investors ponied up $10 million and guaranteed $90 million to get the casino complex out of the ground. i am confident that the tribe would have welcomed a better offer from another investor
i have found that 49% of something is almost always better than 100% of nothing
ymmv

nonsqtr · #3 (**permalink**) 12-17-2007, 05:45 AM

Democrats?

Yuk yuk.... you know, you really oughn't crack jokes when I got coffee in my mouth, it kinda tends to come out my nostrils that way......

I mean, I seem to remember this character outta the past, his name was "Abramoff" or somethin'?

And like, he had somethin' to do with Indian gaming or somethin', right?

NJV · #4 (**permalink**) 12-17-2007, 05:47 AM

is 15 months old, and now McCain is in bed with
your favorte Senate member Joe(I) lieberman.
Plus who cares.

Rebellion · #5 (**permalink**) 12-17-2007, 07:46 AM

Quote:

Originally Posted by nonsqtr";p=&quot

Democrats?

Yuk yuk.... you know, you really oughn't crack jokes when I got coffee in my mouth, it kinda tends to come out my nostrils that way......

I mean, I seem to remember this character outta the past, his name was "Abramoff" or somethin'?

And like, he had somethin' to do with Indian gaming or somethin', right?

What does Abramoff have to do with this? I provided evidence the dems were behind this. I suppose your off topic post is your way of agreeing with that fact.

Rebellion · #6 (**permalink**) 12-17-2007, 07:47 AM

Quote:

Originally Posted by NJV";p=&quot

is 15 months old, and now McCain is in bed with
your favorte Senate member Joe(I) lieberman.
Plus who cares.

You only care about buying votes when it's someone other than your party.

BuckNaked · #7 (**permalink**) 12-17-2007, 07:48 AM

Quote:

Since 2001, the industry and its lobbyists have repeatedly defeated efforts to tighten rules and increase transparency. In the industry's latest victory, it crushed an Indian Gaming Act amendment championed in 2006 by Senator John McCain, a Republican of Arizona. McCain's bill would have prevented huge payouts like those received by Kerzner and Wolman. McCain has said the defeat of his bill was a triumph for special interests.

I'm sure that democrats got their share of the proverbial lobbyist’s pie, but the obvious reality to this story is that from 2001-2006 the republicans owned the government? How was it they couldn't pass legislation that could/would have stopped this travesty again?

Rebellion · #8 (**permalink**) 12-17-2007, 07:50 AM

Quote:

Originally Posted by justabubba";p=&quot

not sure what your problem is with the Indian casinos
investors ponied up $10 million and guaranteed $90 million to get the casino complex out of the ground. i am confident that the tribe would have welcomed a better offer from another investor
i have found that 49% of something is almost always better than 100% of nothing
ymmv

Problems with individuals getting $369 million when those individuals weren't meant to profit from the legislation. And that when the loophole is being closed politicians refuse because their votes are being purchased.

Rebellion · #9 (**permalink**) 12-17-2007, 07:54 AM

Quote:

Originally Posted by BuckNaked";p=&quot

Quote:

Since 2001, the industry and its lobbyists have repeatedly defeated efforts to tighten rules and increase transparency. In the industry's latest victory, it crushed an Indian Gaming Act amendment championed in 2006 by Senator John McCain, a Republican of Arizona. McCain's bill would have prevented huge payouts like those received by Kerzner and Wolman. McCain has said the defeat of his bill was a triumph for special interests.

I'm sure that democrats got their share of the proverbial lobbyist’s pie, but the obvious reality to this story is that from 2001-2006 the republicans owned the government? How was it they couldn't pass legislation that could/would have stopped this travesty again?

They didn't...which is the answer to your question as to why.

BuckNaked · #10 (**permalink**) 12-17-2007, 10:34 AM

I got a calculator Rebellion, saw the numbers, I's just wondering why, if this is something that is near and dear to the hearts of republicans as the vote clearly shows, why haven't they done more to help these poor Indians?

Also it is kinda obvious you seem to think that when political donations are given to democrats they are to bribe their vote, but when it is paid to republicans it is a no strings attached donation?

Unfortunately in this case, and I am only speculating, but it seems the tribal leaders are satisfied with all contracts and agreements and/or changes, because it is yeilding the highest profit mrgins for the tribe. It also shows that the Chairman is satisfied with the agreements/contracts or they could terminate all agreements and contracts immediately after a hearing recognized the violations in question. All of which allow leeway in certain cases according to the law. In this case the possibilities for reclaiming the investments in the designated time period is inadequate in this case since so much was required/guaranteed for the initial investment (s) to insure the benefits & profits they are encountering.

In other words your suggesting that all the initial investments should be smaller, and limited with no possibility of upgrading being available as an additional advantage, and you believe that the agreements should meet the minimum requirements which again in your opinion was the actual intent of the 1988 regulations? That way those evil investors would be seeing a smaller profit margin as would the tribe themselves. Is that what you are really saying?

http://www.nigc.gov/LawsRegulations/...ault.aspx#2711

Quote:

Sec. 2711. Management contracts
(a) Class II gaming activity; information on operators.
(1) Subject to the approval of the Chairman, an Indian tribe may enter into a management contract for the operation and management of a class II gaming activity that the Indian tribe may engage in under section 11(b)(1) [25 USCS § 2710(b)(1)], but, before approving such contract, the Chairman shall require and obtain the following information:
(A) the name, address, and other additional pertinent background information on each person or entity (including individuals comprising such entity) having a direct financial interest in, or management responsibility for, such contract, and, in the case of a corporation, those individuals who serve on the board of directors of such corporation and each of its stockholders who hold (directly or indirectly) 10 percent or more of its issued and outstanding stock;
(B) a description of any previous experience that each person listed pursuant to subparagraph (A) has had with other gaming contracts with Indian tribes or with the gaming industry generally, including specifically the name and address of any licensing or regulatory agency with which such person has had a contract relating to gaming; and
(C) a complete financial statement of each person listed pursuant to subparagraph (A).
(2) Any person listed pursuant to paragraph (1)(A) shall be required to respond to such written or oral questions that the Chairman may propound in accordance with his responsibilities under this section.
(3) For purposes of this Act, any reference to the management contract described in paragraph (1) shall be considered to include all collateral agreements to such contract that relate to the gaming activity.

(b) Approval. The Chairman may approve any management contract entered into pursuant to this section only if he determines that it provides at least--
(1) for adequate accounting procedures that are maintained, and for verifiable financial reports that are prepared, by or for the tribal governing body on a monthly basis;
(2) for access to the daily operations of the gaming to appropriate tribal officials who shall also have a right to verify the daily gross revenues and income made from any such tribal gaming activity;
(3) for a minimum guaranteed payment to the Indian tribe that has preference over the retirement of development and construction costs;
(4) for an agreed ceiling for the repayment of development and construction costs;

(5) for a contract term not to exceed five years, except that, upon the request of an Indian tribe, the Chairman may authorize a contract term that exceeds five years but does not exceed seven years if the Chairman is satisfied that the capital investment required, and the income projections, for the particular gaming activity require the additional time; and

(6) for grounds and mechanisms for terminating such contract, but actual contract termination shall not require the approval of the Commission.

(c) Fee based on percentage of net revenues.

(1) The Chairman may approve a management contract providing for a fee based upon a percentage of the net revenues of a tribal gaming activity if the Chairman determines that such percentage fee is reasonable in light of surrounding circumstances. Except as otherwise provided in this subsection, such fee shall not exceed 30 percent of the net revenues.
(2) Upon the request of an Indian tribe, the Chairman may approve a management contract providing for a fee based upon a percentage of the net revenues of a tribal gaming activity that exceeds 30 percent but not 40 percent of the net revenues if the Chairman is satisfied that the capital investment required, and income projections, for such tribal gaming activity require the additional fee requested by the Indian tribe.

(d) Period for approval; extension. By no later than the date that is 180 days after the date on which a management contract is submitted to the Chairman for approval, the Chairman shall approve or disapprove such contract on its merits. The Chairman may extend the 180-day period by not more than 90 days if the Chairman notifies the Indian tribe in writing of the reason for the extension. The Indian tribe may bring an action in a United States district court to compel action by the Chairman if a contract has not been approved or disapproved within the period required by this subsection.

(e) Disapproval. The Chairman shall not approve any contract if the Chairman determines that--
(1) any person listed pursuant to subsection (a)(1)(A) of this section--
(A) is an elected member of the governing body of the Indian tribe which is the party to the management contract;
(B) has been or subsequently is convicted of any felony or gaming offense;
(C) has knowingly and willfully provided materially important false statements or information to the Commission or the Indian tribe pursuant to this Act or has refused to respond to questions propounded pursuant to subsection (a)(2); or
(D) has been determined to be a person whose prior activities, criminal record if any, or reputation, habits, and associations pose a threat to the public interest or to the effective regulation and control of gaming, or create or enhance the dangers of unsuitable, unfair, or illegal practices, methods, and activities in the conduct of gaming or the carrying on of the business and financial arrangements incidental thereto;
(2) the management contractor has, or has attempted to, unduly interfere or influence for its gain or advantage any decision or process of tribal government relating to the gaming activity;
(3) the management contractor has deliberately or substantially failed to comply with the terms of the management contract or the tribal gaming ordinance or resolution adopted and approved pursuant to this Act; or
(4) a trustee, exercising the skill and diligence that a trustee is commonly held to, would not approve the contract.

(f) Modification or voiding. The Chairman, after notice and hearing, shall have the authority to require appropriate contract modifications or may void any contract if he subsequently determines that any of the provisions of this section have been violated.

(g) Interest in land. No management contract for the operation and management of a gaming activity regulated by this Act shall transfer or, in any other manner, convey any interest in land or other real property, unless specific statutory authority exists and unless clearly specified in writing in said contract.

(h) Authority. The authority of the Secretary under section 2103 of the Revised Statutes (25 U.S.C. 81), relating to management contracts regulated pursuant to this Act, is hereby transferred to the Commission.

(i) Investigation fee. The Commission shall require a potential contractor to pay a fee to cover the cost of the investigation necessary to reach a determination required in subsection (e) of this section.

I thought you was some kind of big shot investment mogul rebellion?

I don't know how to say this with out being kinda cynical but I just think you don't believe the Indians are worthy of the shares they are reaping and this is a way of stopping them from enjoying what you consider unearned windfalls? Kinda like the way most rich people hate it when some poor smuck wins the lottery or some unknown talent wins a million dollar recording contract on American Idol!

Come on admit it, your playing percentages against real numbers to make your point, and if those dollars were going to investors in a venture like oil or Wally world this wouldn’t even be addressed!

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