Financial double whammy for Foxwoods Casino

The news was bad on two fronts last week for the Mashantucket Pequot Tribe, operators of the Foxwoods Resort Casino in Connecticut.
First, the tribe announced it would not appeal an Appeals Court ruling that upheld the state government’s authority to collect property taxes on slot machines.
Then, the officials of Local 2121 of the United Auto Workers announced Foxwoods Resorts executives had informed the union they planned to cut 120 full-time dealers and five assistant floor supervisors.
Casino management would not discuss the layoff, saying instead it was company policy not to discuss matters involving employees.
But, the union did not express any surprise since it has been well-established that the recession, and an explosion of additional gaming facilities along the East Coast, had caused substantial declines in tribal casino revenues.
Union President Billy Shea said volunteers will be sought to accept the layoffs, which, management said, must be completed by March 1.
As for the tax case, a tribal statement charged that state taxes on gambling machines “are an affront to the tribe’s sovereign authority over its territory.”
Foxwoods, and the nearby Mohegan Sun casino, agreed in negotiations with the state to pay 25 percent of its slots revenue in state taxes, provided the state guaranteed the two tribal casinos exclusive right to operate such gaming devices.
At the time, there was no talk of whether the machines would also be taxed.
When the matter was first litigated, a lower court judge ruled in favor of the tribe. That ruling was overturned last July by the 2nd U.S. Court of Appeals that noted a ruling favorable to the tribe would have invited other non-Indian owners of personal property on the reservation to bring similar lawsuits, costing the town of Ledyard hundreds of thousands of dollars annually in litigation costs.
At the time, the tribe indicated it would take the matter up to the U.S. Supreme Court. That idea ended with last week’s announcement.

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