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Kerzner, 67, was ideally placed to make a killing as a financier in Indian gaming. He has succeeded in gaming systems with loose rules before. His native South Africa once banned gambling but allowed it in tribal areas carved out by the apartheid-era white government for blacks to inhabit. Kerzner, who began his career as an accountant, opened the first hotel-casino in 1977 in Mmabatho, the capital of the homeland of Bophuthatswana, about 150 miles from Johannesburg. That year he began planning what would become the opulent Sun City resort-casino-entertainment-theme-park complex. When it opened in 1979, Sun City--with four hotels, a 6,000-seat arena and a 46-acre manmade lake for water sports--became a favored destination for whites in Johannesburg and Pretoria who wanted to escape their nation's moral restrictions and gamble, view soft-porn movies and watch topless showgirls, white and black. Dubbed the richest man in South Africa, Kerzner got into trouble in 1986 when he won permission for a hotel and casino in another homeland, Transkei. To acquire an exclusive gaming license, he had paid more than $900,000 to Transkeian Prime Minister George Matanzima, who was forced to resign and was later jailed for fraud. Kerzner maintained that Matanzima extorted the money, and the South African government declined to prosecute him. Kerzner moved his base of operations to Britain, and from there he expanded his hotel-and-casino empire to France, Morocco and the Bahamas, where he opened the very profitable Atlantis Casino and Resort.
In 1994, as soon as the Bureau of Indian Affairs (BIA) formally recognized the Mohegans as a tribe, Kerzner and several partners reached an agreement to develop and manage the tribe's proposed casino. Their fee: more than the legally allowed 40% of net revenues. The deal with the NIGC was negotiated in private, and then chairman Harold Monteau rubber-stamped it. The other two commissioners and several staff members objected, complaining that Monteau had worked out the generous package in secret. Monteau is now a lobbyist on casino issues for more than a dozen tribes.
The Mohegan Sun replicates the outrageous sensibility of Sun City. Its profitability is equally immoderate. This year it became Connecticut's and Indian country's second billion-dollar casino (after Foxwoods) when annual revenue hit 10 figures. The 32% increase over last year follows the opening of a second complex, which makes the Mohegan Sun's total gaming area larger than the combined area of the Mirage, Stardust and Tropicana casinos on the Las Vegas Strip. Kerzner, the Mohegans and the NIGC will not release details of the full management agreement, but based on financial data drawn from government records, Kerzner will ultimately walk away with an estimated $400 million. His partners will split another $400 million. And Kerzner is going after more. He and his partners have entered into an agreement with the Wisconsin-based Sockbridge-Munsee Band of Mohican Indians to develop a casino in the Catskills.