Casinos in Crisis

Because of the financial crisis, two of America’s largest gambling casinos are heading toward bankruptcy. The casino owners — two Native American tribes — are understandably afraid of losing their businesses. Here’s where the paleface should step in and pay off a historical debt.

Anyone who has spent any time in the northeastern United States may have driven the stretch between Boston and New York at one time or another. Tourists driving this route are met with relatively numerous ads for two gambling casinos. The Foxwoods and Mohegan Sun casinos are 10 miles from one another in the state of Connecticut. Both casinos are the lifeblood of two Native American tribal reservations. The owners are the Mashantucket Pequot and Mohegan tribes, respectively. The tribes have historically never been peaceful neighbors, and now they’re competing with each other to entice a dwindling number of risk-takers into their casinos.

Almost exactly 375 years ago, the two tribes stood on opposite sides of the battlefield. The Mohegans were allied with the British forces. On May 26, 1637, they sacked and burned the Pequot village of Misistuck. One quarter of the tribe was wiped out in the so-called “Mystic Massacre.” A year later, the Pequots were forced into unconditional surrender. The survivors fled or were taken prisoner and then shipped off to the Caribbean to work as slaves on sugar plantations. Only a handful of Pequots survived the war against the British and their Mohegan allies on their ancestral grounds.

The advent of gambling casinos at the beginning of the 1990s meant salvation for the reservations, which are independent territories that are exempt from the restrictive gambling laws of any U.S. state. Americans enthusiastically poured into the casinos; the squalid and dilapidated reservations morphed into capital-rich boom towns. The Pequot built magnificent residential areas, a hospital, various sports arenas and even a $225 million museum displaying their tribal history. The money couldn’t stop pouring in and the Pequot tribe gave every adult tribe member an annual grant of $100,000.

But the financial crisis changed all that. People no longer had enough extra money to be able to afford gambling any of it away. It was an ice cold shower for the tribes. Their entire economy was centered on the casinos and they were suddenly stuck with big losses. Foxwoods and Mohegan Sun are two of America’s biggest casinos — they’re amassing huge debt and they’re going broke. Ratings agencies just recently downgraded them to junk bond status.

This crisis is uniquely problematic. Since the bankrupt casinos are located on sovereign Native American territory, creditors can’t take them over. They can’t even file for bankruptcy and tribal fears of again being dispossessed are mounting. Native American history is complex and traumatic. Native Americans have been robbed, dispossessed, enslaved and massacred. Adding to their woes, white settlers brought new diseases to America that spread across the country like biblical plagues. Some historians estimate that more than 80 percent of the Native American population died in the 16th and 17th centuries as the result of plague, cholera, smallpox or other scourges.

Ironically, the failing casinos have put these facts into the spotlight once again. There has been no solution thus far. Some years ago, I lost $100 at the blackjack tables of Mohegan Sun, but I didn’t take the loss too seriously even though I was a relatively poor student at the time. I felt my loss was somewhat justified. Now, the casinos should be entitled to government guarantees! Now is the time for the guilty paleface to show the tribes some fiscal leniency.