VIII. Conclusion.

Author:Clarkson, Gavin
Position:Leveraging Tribal Sovereignty for Economic Opportunity: A Strategic Negotiations Perspective
 
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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.

18 U.S.C. [section] 1151 (2006).

(6.) In addition to gaming compacts, tribes and states have negotiated compacts covering such areas as law enforcement, child protection, environmental management, hunting and fishing, and taxation. See infra Part II.C.

(7.) See Nat'l Indian Gaming Ass'n, An Analysis of the Economic Impact of Indian Gaming in 2005, at 22 (2005), available at http://www.indiangaming.org/NIGA_econ_impact_2005.pdf [hereinafter Indian Gaming in 2005]; see also Nat'l Gambling Impact Study Comm'n, National Gambling Impact Study Commission Report 2-10 (1999), available at http://govinfo.library.unt.edu/ngisc/reports/2.pdf.

(8.) See Indian Gaming in 2005, supra note 7, at 27-28.

(9.) See Kim Isaac Eisler, Revenge of the Pequots 30-36 (2001).

(10.) Id. at 17.

(11.) See infra Part VI.

(12.) See, e.g., Foxwoods Reports October 2011 Slot Revenue, CasinoMan.NET, http://www.marketwatch.com/story/foxwoods-reports-october-2011-slot-revenue2011-11-15 (Connecticut has received more than $3 billion from the tribe.).

(13.) See, e.g., Michael DeArmond & Michael Fisher, Gaming Fight Far from Over; Casinos: Ballot Losses Spur Tribes, Card Clubs and Horse Tracks to Consider Other Options, Press-Enterprise (Riverside, Cal.), Nov. 5, 2004, at A1 (discussing Gov. Schwarzenegger's efforts to obtain gaming revenue from tribes after claiming the "Indians are ripping us off during his electoral campaign); Editorial, Big Chief Pataki, Wall St. J., Mar. 1, 2002, at A14 (discussing legislation allowing Gov. Pataki to negotiate gaming compacts with New York tribes); Susannah Rosenblatt, Tribes with Casino Profits Averse to Aiding Strapped States, L.A. Times, July 10, 2003, http://articles.latimes.com/2003/jul/10/nation/na-gamble10 (discussing tribal negotiations with Gov. Gray Davis in California and profit sharing by the Pojoaque in New Mexico); see also Lolita C. Baldor, Tribes Complain States Getting Greedy over Gambling Revenue, Las Vegas Sun, July 10, 2003, http://www.lasvegassun.com/news/2003/jul/10/tribes-complain-states-getting-greedy-over-gamblin/.

(14.) See infra Part III.E for a discussion of IGRA.

(15.) See infra Part VI.B.

(16.) See infra Part II.B.

(17.) See infra Part V.

(18.) Stephen Cornell, Sovereignty, Prosperity and Policy in Indian Country Today, 5 Community Reinvestment (Fed. Res. Bank of Kansas City) 5, 5 (1997).

(19.) See Eisler, supra note 9, at 31-36.

(20.) Id. at 42 (characterizing the land as the "worst, most snake-infested, rockledged, swamp-filled, uninhabitable land in the whole [area]"). The name Mushantuxet, as the area was referred to at the time, means "much-wooded land." Id.

(21.) See Mashantucket Pequot Tribal Nation Timeline, Mashantucket Pequot Museum & Res. Center, http://www.pequotmuseum.org/TribalHistory/TribalHistoryOverview/TimelineofEvents.htm (last visited Sept. 17, 2011) [hereinafter Timeline].

(22.) Tracie Rozhon, Connecticut Tribes Seek Land and Identity, N.Y. Times, July 12, 1981, [section] 11, at 1.

(23.) Bruce E. Johansen, Native Americans Today: A Biographical Dictionary 125 (2010).

(24.) See Hold on to the Land, Mashantucket Pequot Museum & Res. Center, http://www.pequotmuseum.org/ExhibitGalleries/LifeontheReservationII/HoldontotheLand.htm (last visited Sept. 17, 2011).

(25.) Eisler, supra note 9, at 53.

(26.) Timeline, supra note 21.

(27.) See Donald Lee Fixico, American Indians in a Modern World 193 (2006).

(28.) William G. Flanagan & James Samuelson, The New Buffalo-but Who Got the Meat?, Forbes, Sept. 8, 1997, at 148, available at http://www.forbes.com/forbes/1997/0908/6005148a.html [hereinafter New Buffalo]; Hilary Waldman, With Wealth Comes Return to Heritage, Hartford Courant, Dec. 22, 1991, at A1, available at http://articles.courant.com/1991-12-22/news/0000207975_1_mashantucketpequots-tribe-drum [hereinafter Waldman, Return to Heritage].

(29.) See Waldman, Return to Heritage, supra note 28.

(30.) See Eisler, supra note 9, at 81-82.

(31.) Peggy McCarthy, Pequot Indians Planning Bingo on Reservation, N.Y. Times, Feb. 17, 1985, [section] 23, at 1.

(32.) Tribal History, Mashantucket (Western) Pequot Tribal Nation, http://www.mashantucket.com/tribalhistory.aspx (last visited Sept. 17, 2011).

(33.) See 25 U.S.C. [section] 1754 (2006).

(34.) See 650 Acres Regained by Indians, N.Y. Times, Sept. 2, 1984, [section] 1, at 55.

(35.) David G. Schwartz, Roll the Bones: The History of Gambling 437 (2006).

(36.) See Nick Ravo, Business Sense and Bingo: An Indian Tribe Prospers, N.Y. Times, Dec. 3, 1987, [section] B, at 1, available at http://www.nytimes.com/1987/12/03/nyregion/talk-pequot-reservation-business-sense-bingo-indiantribeprospers.html?pagewanted=all&src=pm.

(37.) McCarthy, supra note 31.

(38.) Id.

(39.) Portions of this Part draw heavily from two articles previously published by the lead author in the Michigan Journal of Race and Law and the North Carolina Law Review. See Gavin Clarkson, Not Because They Are Brown, but Because of Ea*: Why the Good Guys Lost in Rice v. Cayetano, and Why They Didn't Have to Lose, 7 Mich. J. Race & L. 317 (2002) [hereinafter Clarkson, Not Because They Are Brown]; Gavin Clarkson, Tribal Bonds: Statutory Shackles and Regulatory Restraints on Tribal Economic Development, 85 N.C. L. Rev. 1009 (2007) [hereinafter Clarkson, Tribal Bonds].

(40.) That is, unfortunately for the Indians.

(41.) Tribes in the East were more likely to be removed to Oklahoma, whereas tribes in the West tended to have their land holdings reduced to smaller reservations. Compare Treaty of Dancing Rabbit Creek, U.S.-Choctaw Nation, Sept. 27, 1830, reprinted in 1 Indian Affairs: Laws and Treaties 310-11 (Charles J. Kappler ed., 1904) (signed by Choctaw leaders at bok chukfi ahithac-"the little creek where the rabbits dance"-providing for the removal from their ancestral homelands in Mississippi and Alabama to land in southeastern Oklahoma), with Fort Laramie Treaty, U.S. -Sioux Nation, Apr. 29, 1868, 15 Stat. 635, reprinted in Documents of United States Indian Policy 109 (Francis Paul Prucha ed., 3d ed...

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