In yet another blow for state and local governments who think more legalized gambling is a great way to increase tax revenues comes a story from the Norwich Bulletin about deep financial problems being experienced by the Mohegan Sun casino in Connecticut:
The parent entity of Mohegan Sun recently received a waiver from its bankers, something the casino operator sees as a vote of confidence in its future. Yet it could be the calm before a major storm in Connecticut’s economy in 2012, an analyst said.So just how bad is it?
Foxwoods Resort Casino, whose parent also is in talks to restructure debt, and Mohegan Sun are on course for severe financial problems in the year ahead, said Clyde Barrow, a University of Massachusetts Dartmouth professor of public policy who follows the New England casino industry.
The Mohegan Tribal Gaming Authority was unable to complete a refinancing agreement during its fiscal first quarter, which ended today. With that, the authority’s auditors attached a “going concern” warning to 2011 financial statements, authority CEO Mitchell Etess said Thursday.
A filing with the Securities and Exchange Commission said lack of a resolution would materially impair Mohegan Sun’s ability to operate.
Mohegan’s total debt as of Sept. 30 was $1.6 billion, the authority reported. Of that, $811.1 million comes due within the next 12 months, including $535 million that needs to be paid by March 9 and $250 million in 8 percent notes that mature on April 1. This debt will need to be refinanced before the due dates, the authority said Thursday.So what are the overall implications for the Nutmeg State?
Foxwoods and Mohegan Sun are two of Connecticut’s largest employers and major sources of revenue to the state government. Both are members of the Chamber of Commerce of Eastern Connecticut. Chamber President and CEO Tony Sheridan declined to comment on the Sun’s finances Friday, saying he was still studying them.What is there to study, exactly? The casinos are deep in debt, and unless there is a miraculous economic recovery they are soon going to have to declare bankruptcy. Looks like Chamber of Commerce President and CEO Tony Sheridan is about to find out what Las Vegas already knows: a gambling-based economy is only sustainable so long as the marks still have money in their pockets. As the old saying goes, you can't get blood out of a stone.
Hey, Bill!
ReplyDeleteI did a research paper on Jack Abramoff and the Native American Casino mess.
I said then that unless Native Americans were very, very careful this thing could blow up. I shudder to think what the fine print says on their bank notes.
The eastern tribes have very little land, but out west? Lots of land to lose. Land or no, however, you can bet that the banks and the government henchmen went into this deal with all the good cards in their hands. No pun intended.
I interviewed several people that were associated with the Abramoff debacle. I got either a "No comment," or a statement that due to the constraints of the settlements, they could not comment.
mtlouie
@mtlouie - hey, long time, no hear! The Abramoff angle was one I hadn't considered, but you are no doubt correct that there is a swindle of the tribes lurking in those deals somewhere. Bastards.
ReplyDelete"a gambling-based economy is only sustainable so long as the marks still have money in their pockets. As the old saying goes, you can't get blood out of a stone."
ReplyDeleteNo, but you can always move to pockets that haven't yet been totally emptied. That's probably a key reason they want to build a new casino here in Massachusetts; the gaming industry just corrupted our Legislature into voting them the right to build three sites in a deal that was negotiated largely behind closed doors. Instead of Indians, though, they'll just be screwing blue collar working towns like Palmer and Revere...
NH should take note in its deliberations about gaming. Let Mass dig a bigger debt hole than they have already. Lottery ads about their benefit are the biggest unvarnished lie out there. Gaming is not even a zero sum game, there are only losers in every direction.
ReplyDeleteI have no sympathy for either Ct. Indian casino, especially Foxwoods. I foolishly went there too many times....never won a thing (& I haven't met anyone yet who has!) This joint has the tightest slot machines in the universe.
ReplyDeleteSooo, after screwing thousands of suckers for decades, it's finally payback time. Good riddance, we won't miss you. I hope the morons in Taxachusetts that pushed casinos through fall flat on their pusses too.
im from mass. and I agree...I hope we fall right through, as well...and I suspect that we will....Mohegan has got themselves in such a bind that they cant hide their contempt for getting themselves in this predicament and its obvious in the way they treat their patrons.
DeleteI don't believe that casino may be in dept... really really sucked, stupidly managed place by some dicks, seriously. GUS: "You can;t get blood out of a stone" hehe great saying :) Regards All
ReplyDelete