The Mashantucket Pequot Tribe of Connecticut, owners of Foxwoods, have fallen out of compliance with the 2013 restructured debt that it negotiated with the Bank of America last year.
The tribe has started talks with its creditor for possible new concessions. The casino has seen slots revenue decline by 8.9 percent from the year before.
Foxwoods issued a report that said, in part, “We believe that consumer spending patterns remain challenging in our primary markets, particularly in the mass and mid-tier market segments.” It added, “As well, competitive pressures continue to be impactful, both from the expansion of gaming and marketing activities, in the Northeast gaming market.”
In 2013 the tribe defaulted on its $2.3 billion loan. The solution then was an exchange of debt for $1.7 billion in new debt.
According to the tribe, “At the time, Foxwoods and its lenders agreed upon a financial performance forecast that was premised on improved economic conditions and a leveling out of competitive factors. Those developments have been slow to materialize.”
The tribe also blames a change in consumer spending habits and increased competition. It faces more competition if the voters do not remove the four casinos planned for Massachusetts from play in November.
However it continues to project an upbeat attitude and says it plans to continue to invest in the casino resort, renovate its hotel and open an outlet mall next May.
During this period the tribe has cut its employees by 9.6 percent.
Regional gaming analyst Clyde Barrow says that the same forces threatening Foxwoods are potentially harmful to Rhode Island’s two slots parlors and are reasons for both facilities to add more slots.
Rhode Island voters will decide in November whether the Newport Grand can add table games, another factor in making it more competitive.
