With $2.3 billion in debt, is Foxwoods too big to fail?

The New York Times Magazine goes deep Sunday with a look at Foxwoods, the troubled gambling behemoth in the woods of eastern Connecticut.

Gov. Dannel P. Malloy and other top officials made the trip recently to celebrate the tribal casino’s 20th anniversary, but Mike Sokolove explores the casino’s shaky foundation:

“These days the tribe is dealing with the latest improbability in its turbulent history: financial havoc. The casino is underwater, like a five-bedroom Spanish colonial in a Nevada subdivision. The Pequots misjudged the market, borrowed too much and expanded unwisely. Foxwoods’s debt is on a scale befitting the size of the property – $2.3 billion.”

So, what happens now?

“The fact that Foxwoods is on sovereign tribal land complicates everything. It means the lenders cannot foreclose and take control of the gambling operation but also that Foxwoods probably doesn’t qualify for Chapter 11 – a conundrum that [CEO Scott] Butera described as ‘sort of like being stuck in no man’s land’ and one that financial backers of Indian casinos apparently did not foresee until Foxwoods tanked.”