Bonds of Internal Sovereignty
Federally recognized Native American tribes operate as sovereign nations which have their own governments within the physical domain of the US. That means in theory, because it has not been tested yet, they cannot file for bankruptcy under US Law. Under US law only recognized Native American Tribes may own Casinos on their land, and they cannot offer equity in the casinos, which are tribal property.
Thus, many casinos built in the last 15‐20 years were not built with equity, but with debt. Because of economic circumstances, many casino have defaulted on their debt. The lenders may not swap equity for debt relief or foreclose on these properties. This leaves lenders in an uncomfortable position because all that is left for them is to continued negotiations and endless repayment schedules. The tribes are negotiating steep discounts, but debt holders are reluctant to take a discount on principle, while still having to wait for payments.
The end result of this state of affairs will make it difficult for Tribal Authorities to get Casino financing. The lenders have been backed into a corner and they are letting the world know that US laws do not apply on tribal lands. Future financing will require some form of marker offered by the tribes that lenders can convert to cash in the event of default.