|The National Indian Gaming Commission plans to thoroughly review the Seneca Nation's financing of its casino in Niagara Falls, saying provision of the deal could result in the facility being turned over to its non-Native American lenders. |
In a letter, the commission said it had no problem with the 'extremely high' interest rate on the casino loan, which is 29%. However, the commission has a problem with a provision of the loan that could see the Seneca Niagara Casino given to the lender, headed by Malaysian billionaire Lim Kok Thay, should the Seneca Gambling Commission default on the loan. The agency also complained about a provision forcing the Senecas to get the approval of Lim's company for casino equipment financing. According to the commission, the provisions give the lenders so much control that the deal constitutes a management contract, which would make the deal subject to a more thorough federal approval.
Agency officials say the casino can continue operating, while lawyers for the tribe and the lender are rewriting the loan provisions to try to reverse the agency's decision.
At issue are provisions in the loan deal that could give the casino's $80-million lender, Freemantle Ltd., control of the facility if the loan defaults. Other provisions allow Freemantle, created by Lim, to seek a receiver to run the facility in case of default.
The above-cited remedial default provisions collectively permit regulation, operation and ownership by an entity other than the nation,' wrote Coleman, the Indian Gaming Commission lawyer. That would contradict the federal law governing Indian gambling, which is 'based on the time-honored principles of tribal sovereignty,' Coleman wrote.