The Catawba Nation of North Carolina is looking to reduce the separation fee levied by casino financier, SkyBoat LLC. The federally-recognized tribe faces the prospect of having to pay SkyBoat a $125 million severance fee, should they choose to dissolve the partnership set up for the establishment and management of their casino resort.
The Catawba Nation inaugurated a temporary gambling facility at their proposed Two Kings Casino west of Charlotte in summer 2021. The facility, which currently houses approximately 1,000 slot machines, was established a year after the tribe obtained federal recognition.
SkyBoat is an enterprise spearheaded by North Carolina businessman Wallace Cheves, assisting the tribe in ushering their 17 acre land in King County into federal trust. This was an essential prerequisite to conduct gaming activities as required by the Indian Gaming Regulatory Act (IGRA).
The quid pro quo for Cheves’ help was an understanding that the Catawbas would partner with SkyBoat for the establishment and management of their future casino enterprise. However, the National Indian Gaming Commission alerted the tribe last year that SkyBoat had exerted excessive control over its gaming initiatives, thereby violating their agreement as per IGRA stipulations.
Back in 2021, a pact between the tribe and SkyBoat specified that the Catawbas would be obliged to pay $125 million in the event of a termination of their partnership. According to newly sworn-in Catawba Nation Chief, Brian Harris, this separation fee is unfair and unjustifiable.
SkyBoat, by breaching IGRA regulations, took on a principal role in managing contracts with third-party vendors. As a result, the Catawbas are faced with potential civil penalties of $57,527 per day and are exploring all possible measures to rectify this situation, including the dissolution of the agreement with SkyBoat. However, the hefty separation fee agreed upon by Harris’ predecessor is the major obstacle in this course of action.
Voicing his concerns, Harris asserted that SkyBoat hasn’t provided any concrete documentation to justify the $125 million separation fee. He has expressed his intention to continue negotiations for an exit agreement that would be acceptable to both parties and remain optimistic that construction on the permanent casino might commence early in the next year.