Where have all the Indian gaming profits gone?
Isn't it interesting that the people who have made the most money off of Indian gaming in Connecticut aren't even American Indians.
The big money off the top at Foxwoods, 9.9 percent of adjusted gross income through 2016, has been going to the rich Malaysian family that put up the first $58 million to build a casino on the Mashantucket Pequot reservation.
The deal was brokered by G. Michael Brown, the savvy New Jersey gambling lawyer who was hired by the Pequots to find someone to finance their casino and who - ta-da - came up with his own clients, the Lim family of Malaysia.
Certainly the Lims are forever grateful to Brown for helping tap so deep and for so long into the Pequot golden goose.
Indeed, even as a recession-battered Foxwoods struggles under the onerous terms of the original Lim loan deal, Brown continues to profit by his associations with the Malaysians.
He was part of the deal in which the Lims put up money seven years ago for the Seneca Indians to build a casino at Niagara Falls. The $80 million, five-year loan had a whopping 29 percent interest rate.
More recently, Brown was the Malaysians' point man in a deal to take a near-controlling share in a racetrack and casino in Monticello, N.Y., that includes an interest in a proposed casino resort by the St. Regis Mohawk Tribe.
And in Massachusetts, the Malaysians have surfaced as the new partners of the Mashpee Wampanoags, who are hoping the state may soon legalize casino gambling. Surely Brown, the Malaysians' U.S. counsel, is behind the scenes in that deal, too.
The other big winners in Connecticut Indian gaming are the original partners of the Mohegan Indians, including local developer Len Wolman and the South African gambling king Sol Kerzner.
Kerzner and Wolman didn't make out so well with their $690 million investment in the Twin River slots hall in Rhode Island, which is mired in bankruptcy.
But their investment in Trading Cove Associates, the original managers of the Mohegan Sun, continues to pay them handsomely. In fact, the partners are making far more off the casino than tribal members.
Under the terms of a controversial buyout of the managers' original contract, the tribe continues to pay the Trading Cove investors 5 percent of annual gross revenues through 2014, a deal that has been estimated to be worth up to $ 1 billion.
Wolman and Kerzner had been working with the Wampanoags in Massachusetts until they were muscled aside recently by the Malaysians.
According to reporting by the Cape Cod Times, Wolman and Kerzner had signed a deal with the now disgraced Wampanoag chairman (he's serving time for federal embezzlement and corruption charges) that would have earned them three times as much money from a Massachusetts casino than the tribe.
It's hard to feel sorry, though, for the losers in a battle of the leeches.
I'm sure the Malaysians won't make much less.
How did this happen?
And how did a rich Malaysian family, the origins of its Asian-Pacific gambling monopoly murky, escape any state or federal regulatory scrutiny here and manage to extract obscene profits from an industry that even today is not welcome in many places?
Those would be good questions for all of the lawmakers who have sat idly by while it happened or for those in Massachusetts, where it may be about to happen all over again.
This is the opinion of David Collins.
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