The history of gambling 'resorts' as reparations to Indian tribes is seedy, at best.
Various non-Indian operators, many of them from outside the U.S., have made tens of millions of dollars 'advising' tribes as the deal-makers to get these projects going. They typically provide all the cash necessary as 'loans', so that although 'tribal members' own the equity, all the economics are controlled by, and flow to, the non-Indian financiers.
The tribes are then constructed for the purpose of owning the legal equity by compiling anyone who jumps on board with an ability to prove, via often-dubious geneological claims, that they have any (as in, any) of that tribe's blood running through their ancestral veins...
The Wall Street Journal looked closely at the Foxwoods project in Connecticut in August, 2001, revealing many of the sordid details that are typical of these deals:
How Foxwoods became king of Indian casinos is largely a tale of four men: Richard "Skip" Hayward, a former pipefitter, "one-sixteenth Indian, at most," according to a well-received study of the Pequots; Tom Tureen, an activist lawyer specializing in Indian claims; Michael "Mickey" Brown, a mob prosecutor turned casino consultant; and Lim Goh Tong, a Malaysian gambling billionaire whose efforts to tap the U.S. market were frustrated until he struck up an alliance with the Pequot.
...Lim Goh Tong, the Malaysian casino kingpin. Mr. Lim left China's Fujian Province in 1937 and made a fortune in large-scale construction projects throughout Malaysia. In 1969, Malaysia granted its only casino license to Mr. Lim. He opened the Genting Highlands casino resort in the mountains 25 miles northeast of Kuala Lampur.
Genting Highlands became a smashing success, raking in hundreds of millions of dollars every year, despite a prohibition on gambling by Malaysia's official religion, Islam. Mr. Lim expanded his Genting Group holdings to include casinos in the Bahamas and Australia, sugar and rubber plantations, power plants, a cruise line and an e-commerce division. Like Foxwoods, Genting closely guards its finances. But Mr. Lim's net worth has been estimated at over $5 billion.
Mr. Lim's dream of a U.S. casino proved elusive until 1990, when Mr. Brown brought him to Mr. Hayward's bingo hall in rural Connecticut. More than 20 U.S. financial houses had turned the Pequots down, but Mr. Lim saw the future. He extended a $58 million construction loan in 1991 and a $175 million line of credit in 1993, according to a confidential bond prospectus obtained by the Providence Journal.
...Foxwoods deposits its daily casino take into accounts bearing the name Kien Huat Realty, a holding company controlled by Mr. Lim. Kien Huat receives 9.9% of the casino's adjusted gross income until 2016, plus interest payments on the two loans, the Providence Journal reported.
'Adjusted Gross' in this case actually means off the top, and that's not all;
Further, the tribe agreed to deposit all the casino's daily receipts - now amounting to roughly a billion dollars a year - into Kien Huat's accounts for the 25-year term of the loan.
...In 1995, according to the prospectus, Lim got at least $21.6 million in contingency interest. The loan balance at that time was $21.2 million.
...Today (in 1999), with 11,700 workers, Foxwoods is Connecticut's largest private employer.
(
Providence Journal reporting here)
Sounds like a perfect means to launder money internationally....
The schemes aren't too different from the 'minority-interest' broadcast and wireless investment scams, whereby a bunch of rich white guys would get together and fund a minority investor (who would put up zero cash, typically) to get control of licenses under the FCC's minority ownership rules.
So it's fitting that the latest player in the Indian gaming space is a rich white guy who
made his original millions with minority interest broadcast investment schemes. His financial partners include the
private equity arm of Daniels and Associates.
Steve Hillard intends to take 500 acres or so just east of DIA and turn it into a gambling resort. He'll make Lim-like money off the top, and has promised the tribes they'll rake in $1.1 billion or so over the next decade.
Hillard is
using Alaskan-based tribes and consultants to try to leverage Senator Campbell, the only Senator with Native American blood (25%?), to support the deal. Why Alaska? Because Senator Ted Stevens of Alaska is the happiest land-seller in Congress, and his son-in-law works for an Indian gaming lobbying firm. The bet is that Stevens will deliver Campbell.
The media outed all this a couple of weeks ago, and Campbell, who may be up for a touch re-election fight against Gary Hart, is running for the hills.
Which may not mean much, since he's changed his tune on policies time and again in his career.
The rest of
the powers that be in the state are currently opposed;
Beauprez (the U.S. Rep in whose district the casino would reside), a banker in real life, said the casino "strikes me as one of those deals where somebody comes charging into your office and says, 'Boy, do I have a great idea. If only A, B, C, D, E and F come to pass, would you make me a loan?'.
Hillard et al recently said that they'd
give up the tribes claims to 27 million acres of Colorado land in exchange for the casino deal. 27 million acres that includes .....
... Denver. Boulder. Fort Collins. Longmont. and Colorado Springs.
Stay tuned....
