The Handbook of Municipal Bonds

CASE STUDY 21

Seminole Tribe Bets on Taxability

Joseph Krist Senior Municipal Analyst Lord Abbett & Co. LLC

 

 

 

In the late 1990s, the Indian gaming industry began to undergo a huge expansion across the country. This industry was expanding after the passage of the Indian Gaming Regulatory Act (IGRA) in 1988. The legislation provided a framework for federal regulation of the industry and established a basis for negotiations between tribes and the states. By 2001, there had been several tax-exempt bonds issued to finance projects where the source of revenue for repayment derived from tribally owned gaming facilities. These included large hotel and gaming complexes at sites in the northeast—Mohegan Sun and Foxwoods.

The Seminole Tribe of Florida had historically been one of the more successful tribes in terms of commercial business operations. Among these were significant, but limited bingo-based facilities that the tribe had operated for many years at sites in Tampa and Hollywood, Florida. The development nationwide of the Indian gaming industry and the successful partnerships achieved between other tribes and private gaming operators encouraged the Seminole’s to take advantage of legislative changes in Florida that permitted the expansion of the Seminole’s gaming activities.

In April of 2002, the Capital Trust Agency issued $290,000,000 of municipal bonds, the proceeds of which were distributed to the Seminole Tribe of Florida. The tribe planned to apply the proceeds to the cost ...