Analysis of Tribal Casino Bonds
Megan Neuburger Director Fitch Ratings
Michael Paladino, CFA Director Fitch Ratings
Jessalynn Moro Senior Director Fitch Ratings
David Litvack Managing Director Fitch Ratings
In recent years, Native American governments have increasingly sought and gained access to the larger capital markets. Fitch expects this trend to continue as the financial resources and capital needs of Native American governments grow. Notably, there are stark differences that exist in the size and scope of current day Native American gaming operations. A small group of tribes with significant financial resources has had the ability to greatly expand their operations. Noteworthy recent developments include the Seminole Tribe of Florida’s acquisition of Hard Rock from Rank Group Plc; the partnership of the Mashantucket Pequot Tribal Nation, owner of the Foxwoods casino, with MGM Mirage; and the Mohegan Tribal Gaming Authority, owner of Mohegan Sun, being awarded a gaming license to operate slot machines at the Pennsylvania Downs race track.
However, many of the Native American gaming issuers now entering the debt markets own and operate much smaller gaming enterprises, and many are issuing debt to construct their first gaming facility. Most of these Native American gaming issuers operate single-site gaming enterprises with limited diversity in the revenue stream. The gaming operations often function with minimal liquidity levels due to the desire of tribal ...