Clarkson, Gavin, Sebenius, Jim, Missouri Law Review
Although Seminole eviscerated IGRA's mechanism for balancing tribal and state interests, tribes are still able to negotiate gaming compacts that advance tribal interests. The agreement concluded between the Seneca Nation of Indians and the State of New York is an example of a post-Seminole agreement where the tribe applied the lessons from Foxwoods. (492) Although a successful outcome may have required a heightened level of strategic negotiation acumen on the part of the tribe, the Senecas were able to negotiate a deal that allowed them to open a casino on the shores of Niagara Falls and were able to convince the state essentially to give them the land upon which to build the casino.
Although much of this Article has focused on the negotiation dynamics surrounding gaming compacts, the strategic lessons from these negotiations are nonetheless applicable beyond the gaming context. For example, the most recent bargaining challenge for the Pequots is not with the State of Connecticut but instead with the bondholders that have lent money to the tribe's gaming operations. (493) While Foxwoods remains the largest casino in the United States, it was nonetheless hit by the economic downturn in 2008 just like the rest of the gaming industry. (494) As a result, the tribe sought to restructure nearly $2 billion in debt. (495)
Unlike traditional corporate gaming companies, however, Foxwoods and its bondholders do not have the complete set of restructuring tools at their disposal. Because of their sovereign status of the tribe and the prohibition of non-tribal ownership of tribal casinos, Foxwoods could not do a debt-for-equity swap or raise additional capital by selling off assets on tribal trust land. (496) While corporate gaming creditors may have the option of operating a gaming facility after the gaming operator seeks protection in bankruptcy, tribes are not eligible for relief under the bankruptcy code. (497) Since tribes do not fit into any of the categories of debtor under Section 109 of the bankruptcy code, (498) reorganization under bankruptcy is not an option. Thus the only option is a negotiated restructuring with the various classes of bondholders.
The Peqots and their creditors are not the first to face this challenge; at least three other tribes have defaulted on their obligations as a result of the economic downturn. (499) While the Poaque Pueblo (500) and Little Traverse Bay Band of odawa Indians (501) have successfully concluded their restructuring negotiations, the Pequot negotiation is still ongoing as this Article goes to press. Although a detailed analysis of the respective BATNAs of the various parties in these restructuring negotiations is beyond the scope of this Article, the underlying negotiation principles remain the same.
In fact, in a post-Seminole world where tribes cannot force states to the bargaining table, gaming compact negotiations arguably have become more like non-gaming negotiations, where advancing the full set of one's interests requires jointly decided action. The story of Foxwoods provides excellent examples of both types of negotiations.
(1.) United States v. Kagama, 118 U.S. 375, 384 (1886).
(2.) See, e.g., infra Part VI.A.
(3.) See infra notes 91-95 and accompanying text.
(4.) See infra notes 96-104 and accompanying text.
(5.) 18 U.S.C. [section] 1151 defines "Indian [C]ountry" as
(a) all land within the limits of any Indian reservation under the jurisdiction of the United States Government, notwithstanding the issuance of any patent, and, including rights-of-way running through the reservation,
(b) all dependent Indian communities within the borders of the United States whether within the original or subsequently acquired territory thereof, and whether within or without the limits of a state, and
(c) all Indian allotments, the Indian titles to which have not been extinguished, including rights-of-way running through the same. …