Feds Close Meskawki Casino

KCCI-TV Des Moines, IA ^ | 5/23/03

[hawkeye101]

Feds Close Meskawki

Judge Orders Casino Closed

POSTED: 7:38 a.m. CDT May 23, 2003 UPDATED: 7:43 a.m. CDT May 23, 2003

DES MOINES, Iowa -- A federal judge in Cedar Rapids has ordered federal marshals into Tama to close the Meskwaki casino. This action comes after weeks of squabbling between two fighting factions over control of the casino.

Witnesses at the casino say the marshals are escorting gamblers out of the facility.

Earlier this month, the National Indian Gaming Commission ordered a council appointed by the hereditary chief to turn over control of the Meskwaki government and casino to the council elected in 1999.

The agency said the appointed council was operating the casino in violation of federal gaming rules, but that council said it would not comply with the order.

The dispute began in March when the appointed council took control after the elected leaders ignored two petitions for recall elections submitted last fall.

The Meskwaki casino is one of Iowa's largest, with gross revenues reportedly more than $100 million a year.

[VRWC_minion]

If it meant that the debt owed to those infamous financers were more quickly reduced

Would you take a home loan that required you to repay it within 5 years ? This is what the BIA requires for the terms for a casino, even though the casino has a usefull life of 15 years.

A ripple effect occurs. During the first 5 years, the casino has to use virtually all of its cash to repay principal. After that it needs to replenish its under capitalized operations. Then it probably needs to borrow new debt to finance long term improvements. Thus it could be 10 years before there is any significant distributions available.

Unlike a traditional business that would arrange its financing to match the life of the assets. Because of the BIA rules the cash flow will be heavily back loaded.

[VRWC_minion]

tribes would be better off creating opportunity for their members rather than providing a tribal welfare system.

I agree.

[been called a cynic]

First of all, the tribe I worked for certainly didn't have their loan paid in 5 years. Maybe they refinanced.

Secondly, you missed the point. You are wrong. They can and do get cash distributions regardless of the terms of their loan.

[Godel]

Interesting.

[been called a cynic]

By the way, no home I owned would gross $100 million a year, so it's really not a good comparison.

[dljordan]

Kind of sounds like the U.S. government.

[been called a cynic]

doesn't it, though?

[VRWC_minion]

First of all, the tribe I worked for certainly didn't have their loan paid in 5 years. Maybe they refinanced.

They would have needed a waiver to go loner than 5

Secondly, you missed the point. You are wrong. They can and do get cash distributions regardless of the terms of their loan.

All agreements that I have seen allow for a sharing of the cash flow until the debts are repaid. Therefore the amounts available for the tribe are only a a very small portion until they are repaid.

However, your main point different than mine to start with and its something I don't disagree with. Your point is that Casino's are not a healthy business. I personally have problems with that myself and even though I have done financial work for them in the past I rather not.

But, my point was to the original post that these casino's are a drain on the US taxpayer because Indian's don't pay taxes. That is demonstratably false because even assuming no Tribe member pays any tax, all the other avenues of revenues the Federal Gov't gets is still a posistive.

As for the best way to bring Tribe's into a better more stable economic posistion, I think Casino's can help but they are not the primary answer. However, the primary answer needs to come from the individual and it cannot be imposed from the outside. An unmotivated person isn't going to change just because of the opportunities or lack of opportuntites around him or her.

[VRWC_minion]

Correction

First of all, the tribe I worked for certainly didn't have their loan paid in 5 years

Its been a few years since I did this work and I am combining two things into one that makes the "effective" borrowing period 5 years. Most lenders are reluctant to lend to tribes because of their thin management experience, lack of track record, and especially because of their soveriegn status making collection difficult and risky.

They typically will require a manager have control over daily operations. The management contract is typically limited to 5 to 7 years making the loans be due over the same time period.

[been called a cynic]

You are correct in that casinos are an economically unhealthy business. They could theoretically be used as a catalyst for change, but they generally are not being used in such a manner.

I believe the manner in which the tribe i worked for was able to carry their loans forever worked this way: get the loan, build a little shed with a slot machine...as soon as the electricity is turned on, independently finance phase II...when the ink is dry on those papers, start looking for a better interest rate for phase III. phases I, II, III, IV and V may be drawn up before the ground is ever broken, but perhaps the bureau is only interested in the initial loan.

there is always a loophole.

[been called a cynic]

In theory, the gaming agency ensures that the gaming commission and the casino's general manager have authority over the casino.

The reality is different. The tribal political system has ultimate authority.

[VRWC_minion]

The reality is different. The tribal political system has ultimate authority.

They have ultimate authority but many are not equiped to run a business. They are at the mercy of their advisors.

[VRWC_minion]

believe the manner in which the tribe i worked for was able to carry their loans forever worked this way: get the loan, build a little shed with a slot machine

This works if their is little threat of nearby competition. If there is any, they can loose if they don't grab market share from the outset.

[been called a cynic]

My friend, they do not have advisors. They refuse advice. They enjoy their omniscience.

[VRWC_minion]

My friend, they do not have advisors. They refuse advice. They enjoy their omniscience

I know what you mean.

[Diplomat]

Do these tribe members vote in state and federal elections?

[Robert_Paulson2]

The points VRWC made... were spot on.

[Husker24]

I thought Indian reservations were supposed to be soverign territory, this is none of the Feds business.

[fish hawk]

Like the Indians never got ripped off. Casinos and tobacco are the red mens revenge.

[nonliberal]

...you are misinformed...if you believe that casinos are an economic boon to the areas they serve."

So all the newspaper reports of 17 year-old Jimmy Two-Dogs-Mating crashing his THIRD Lexus that daddy bought him are untrue?