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Casino Giants Look for Investments

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MASHANTUCKET, CONN. - It won't stop with a racino bid in Bangor, Maine,
said the top executive of Foxwoods Casino Resort, one of the largest tribal
casinos in the country.

William Sherlock, president and chief executive officer of Foxwoods, said
that the company and its owners, the Mashantucket Pequot Tribal Nation, are
gearing up for a series of investments outside of its operating area. A new
corporate arm is taking a close look at a racetrack and slot machine parlor
in Pennsylvania, to be run jointly with a consortium of non-Indian
horsemen.

Across the Thames River 12 miles away, the Mohegan Tribe is making similar
plans. The owners of the Mohegan Sun, the country's other largest tribal
casino, already are backing the Menominee Tribe in Wisconsin in the
purchase of a greyhound racing track in Kenosha, an easy drive from both
Chicago and Milwaukee. The Mohegans recently hosted a delegation from the
Torres Martinez Desert Band of Cahuilla Indians from southwestern
California and expect to hear from more.

The investment styles differ, tracking the different personalities of the
two Connecticut tribes, but the strategies have several common features.
They pay close attention to racinos, calculating that the addition of slot
machines to fading racetracks is the likeliest source of new competition.
And at least some of the deals make the financing and managerial skill of
the super-wealthy casino powers available to remote and hard-pressed tribes
anxious for economic development.

A prime example is the Mashantucket backing for the Penobscot and
Passamaquoddy in central Maine. In the twisty turn of events since Maine
voters last November swamped a referendum for a $600-million Two Tribes
casino, but approved slot machines for racinos, the tribal consortium has
emerged as a contender to run the raceway in Bangor's Bass Park. Sherlock
told Indian Country Today that the Mashantucket Pequots have set up a
Foxwoods Development Corporation as a vehicle for the Maine investment, and
for future deals. He said it would be looking outside of a 150-mile circle
around Foxwoods.

Sherlock said the new division had a partnership with a horseracing
consortium in Pennsylvania to develop a racetrack-casino in the Lehigh
Valley. But their plans had to cross two hurdles, he said. "A: Pennsylvania
has to pass a law allowing slot machines and Gov. Rendell has to sign it.
B: There are nine applicants for one license."

If the Foxwoods partnership won the license, he said, it would look at a
site along the Lehigh River valley between Allentown and Easton. He said it
offered a highly-favorable market, drawing on Philadelphia and western New
Jersey.

Although both this plan and the Bangor application would bring Foxwoods
into the horse-racing industry, Sherlock said the casino personnel would
manage the slot machine operations and rely on its horsemen allies to
operate the track.

He added that the Development Corporation was busy examining other
proposals but that it had already decided to pass on a possibility in
Illinois when the state demanded too high a tax rate. The partnership, he
said, operated as a fully taxed private business. It would not claim
tax-free tribal status.

The Mohegans are also examining a long list of business proposals, Chairman
Mark Brown told Indian Country Today. Rather than incorporate a separate
business, however, it worked through a joint committee drawn from Mohegan
Sun executives and tribal council members. William Velardo, president and
general manager of the Mohegan Sun, is chairman of the committee. It
follows a detailed set of criteria, said Brown, including potential
profitability and sound business planning, but it also seeks partnerships
with tribes left behind by the gaming boom.

The investment with the Menominee was an excellent fit, Brown said. The
tribe was the largest and poorest in Wisconsin, but its plans to purchase
Dairyland Park, an ailing dog track in Kenosha, would give it a casino
location roughly halfway between Milwaukee and Chicago. In addition, said
Brown, the Mohegan leadership was getting along very well personally with
the Menominee council.

"They're like us," said Brown. "Very laid back."

The visit from the Torres Martinez Desert Band attracted some attention,
but Brown indicated that the contact was still preliminary. "They have a
compact," he noted, referring to their agreement with former California
Gov. Gray Davis, signed shortly before his recall. The Band has plans for a
casino as well as slot machines in a truck stop on a main highway south to
Mexico.

Brown said he expected to receive a series of similar proposals, even
without sending staff out to look for them.