Casino dream fading?

It depends on whom you ask. Supporters of the $1 billion project say a disagreement between the tribe and its financial backers over contract terms forged two years ago is a minor blip. Opponents see the dispute as one more indication a mega-casino resort will never open its doors in Middleborough.

Newly elected tribal leaders say they recently unearthed vital information in letters that they say former Tribal Council chairman Glenn Marshall, now in federal prison for embezzlement, failed to show the council before inking the 2007 casino development contract with investors Sol Kerzner and Len Wolman. In the letters, an American Indian gaming expert had advised the tribe against signing the pact.

“It wasn’t a good deal for the tribe, but the information was never shared with the Tribal Council,’’ said current council chairman Cedric Cromwell.

Those letters, along with the conclusions reached in a recent casino feasibility study, have convinced Tribal Council members that the contract should be revisited. So when the investors recently directed the council to reaffirm that agreement, the council voted unanimously not to do so.

Wolman and Kerzner, who built Mohegan Sun in Connecticut, are now considering their options, said Cromwell.

The pair stopped making scheduled payments to the tribe last month. Cromwell said they have the right to do so under the contract, if certain benchmarks aren’t achieved. One of those benchmarks is the tribe’s pending application to place the targeted 500-acre casino site into federal trust.

The land-in-trust request was derailed by a Supreme Court decision a few months ago. The court ruled that only tribes with federal recognition prior to 1934 had the right to place land into federal trust under the Indian Reorganization Act. The Mashpee Wampanoag won federal recognition in 2007, and to date there has been no legislative fix that could move the tribe’s application forward. Cromwell said tribal leaders are working to rectify that situation.

Neither side is saying it is walking away from the deal, however.

“Under the terms of our agreement with the tribe, which is in full force and effect, we do not feel it would be appropriate at this time for us to comment on any pending matters with the tribe,’’ the investors said in a recent statement.

Meanwhile, Middleborough officials say the difference of opinion between the tribe and investors has no bearing on the multimillion-dollar casino agreement the town cut with the tribe. They say they intend to continue plodding forward. Selectmen chairman Patrick Rogers said a $250,000 annual payment from the tribe is due in the selectmen’s office within the next two weeks, and town leaders aren’t anticipating any delays.

“I don’t think there are any ramifications for Middleborough,’’ Rogers said. “You can read a lot of conjecture into this, but I refuse to do that.’’ He said officials have not had any conversations about the situation with tribe leaders.

But casino opponents like Casino Facts president Rich Young, who is also president of Casino Free Massachusetts, said it is hard not to draw conclusions from the recent developments.

“Everyone knows the deal is dead except for the selectmen in Middleborough,’’ Young said. “I think the tribe finally came to the realization that we came to early on: The whole deal for the Middleborough casino stinks for everyone except the investors.’’

Casino gaming specialist Clyde Barrow, a professor at the University of Massachusetts at Dartmouth’s Center for Policy Analysis, still believes the deal the town cut for the casino is a good one. And although there has been little financial information released regarding the pact between the Mashpee Wampanoag and their financial backers, one can assume its terms are similar to the deal Wolman and Kerzner had for Mohegan Sun, Barrow said. That agreement gave the investors a large chunk of the casino revenue and the Mohegan tribe considerably less, he said.

“Obviously, things are in flux,’’ Barrow said. “And it’s clear everything is going to come to a head this fall.’’

He pointed out that state legislators are likely to consider slot machines at race tracks as well as casinos in specific locations in Massachusetts during their discussions over the next few months.

“The question is whether Wolman and Kerzner want to remain as the tribe’s backers,’’ said Barrow. “They may pull out, particularly when they may have competition in Massachusetts from other casinos and racinos. It’s no longer the monopoly they were originally talking.’’

The failure of the backers to make their regular payment could show they are considering pulling out, or it could be simply a way of pressuring the tribe to reaffirm the 2007 agreement, he said.

Christine Legere can be reached at christinelegere@yahoo.com.