The Making of a Casino Nation


How a Small Native American Tribe

Created the World's Most Profitable Casino

By Kim Isaac Eisler

Simon & Schuster -- 267pp -- $25

Five years after its 1992 opening, southeastern Connecticut's Foxwoods had become America's largest and most profitable casino. But Richard "Skip" Hayward, the casino's founder and the leader of the Mashantucket Pequot Indians, was worried. The Mohegans, a rival tribe backed by South Africa's Sun City group, were opening their own gambling house in a more accessible location across the Thames River. What's more, Las Vegas impresario Steve Wynn was working to bring gambling to the depressed town of Bridgeport, just an hour up the interstate from New York.

Then one afternoon, while sipping a scotch at his waterfront home on Long Island Sound, the solution hit Hayward: He could run high-speed ferries between New York and Foxwoods. But rather than just contract for the ferries, Hayward set up a company to build them, laying out a total of $6 million. In the end, the boat-building venture came a cropper when New York Mayor Rudolph W. Giuliani refused to let the big TriCats dock at Chelsea Piers on the Hudson River--and after Hayward had one of the 60-mph crafts make a demonstration run into Groton Harbor, where its huge wake did $50,000 in damage.

Other grand schemes of Hayward's included using a bullet train to haul gamblers down from airports in Providence and Hartford and erecting a $100 million museum to commemorate all Native Americans. Of these, only the museum got built.

As Kim Isaac Eisler tells it in his engaging Revenge of the Pequots: How a Small Native American Tribe Created the World's Most Profitable Casino, the ferry fiasco and a few other misadventures opened the door for Hayward's tribal rival, Kenneth Reels, to stage a coup that deposed Hayward. Reels and his allies now oversee the $1 billion casino, which provides some 13,000 jobs in backwoods Connecticut and forks over some $100 million every year from slot machine revenues to the state treasury.

How did wealthy Old Yankee Connecticut wind up as the leader of the Indian gambling movement? Start with good intentions. In the mid-1980s, Mothers Against Drunk Driving wanted to let high schools set up post-prom gambling nights to keep kids out of cars. Following the advice of the state's then-Attorney General, Joseph I. Lieberman, the organization got a law passed allowing play-money wagering at blackjack, craps, poker, and roulette. MADD's scheme did not cut down on teen driving accidents, but it did open a generous loophole for sharp-eyed Indian-rights lawyer Tom Tureen. The Pequots already had bingo. Using the MADD precedent, he won them a license for a full-scale "charity" gambling casino.

The state's pols did worry about the moral implications of casino gambling--and the appeal it might hold for organized crime. "The mob will eat you alive," warned Governor Lowell Weicker as he sought to repeal the charity gaming laws. But Weicker lost. Those cautious Connecticut lawmakers were already eyeing jobs and revenue. Huge defense cutbacks at Electric Boat Co. in Groton meant that any job mattered. Even Kevin Costner's Dances With Wolves played a role: On the heels of that popular flick, nobody wanted to look anti-Indian.

Investors were a different story. Most never believed people would drive hours from Boston, Providence, or Hartford just to play cards in swampy Ledyard. But a canny Asian, Lim Goh Tang--possessor of the only gambling license in Malaysia--was only too eager to put up $60 million in exchange for a 10% cut of profits. The result in less than a decade is an empire that makes the Pequots the richest tribe in the U.S., and which serves as a model for all Indian gambling promoters.

Eisler, an editor at Washingtonian magazine, introduces a roomful of famous folk involved in the fight. The Pequots successfully kept Donald Trump out of Connecticut--in addition to Wynn. But they lost to the Mohegans after that tribe engaged none other than superlawyer David Boies, who, we're told, is such a fan of gambling that he once kept a craps table in his law office. New York mobster John Gotti, on the other hand, declared that he wanted nothing to do with legal gambling, saying he could make more off of loan-sharking to the losers exiting the casino.

Eisler does a good job of laying out all this history, but it comes at the expense of digging into more current issues. Connecticut is now hooked on Pequot revenue. Yet the villages near the reservation get no economic windfall while suffering some 60,000 drive-through gamblers every weekend. The secretive Pequots shun press critics and liberally buy influence. They gave Clinton $500,000 when Senator Christopher Dodd (D-Conn.) was his fund-raiser. Then there is the issue of whether they legally deserved a license at all. Without Reservation, a 2000 investigative book by Jeff Benedict, argues that the scattered Pequots lacked the attributes required by the Feds to win recognition as a tribe.

Eisler doesn't touch this one. He simply shows how events came together thanks to Hayward's street smarts and good timing. Today, there are more than 250 applications in Washington from tribes, most with heavy outside investor backing, hoping to hit a similar jackpot. The Pequots certainly showed how to beat the odds. The question is, should everyone else be playing their game?

By Bob Dowling

Dowling once worked in a Vegas-type casino.

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