Black’s crapshoot

At Foxwoods, betting on black is about to take on a whole new meaning.

Billionaire Leon Black has been quietly buying up debt in the struggling Ledyard, Conn.-based casino in a bid to gain control, sources told The Post.

The purchases come as the cash-strapped casino’s owner, the Mashantucket Pequot Tribal Nation, yesterday revealed that it missed an interest payment on its $2.3 billion in debt and that it will default on its loans on Dec. 16.

Exactly how much of Foxwoods’ debt is held by Black’s Apollo Management is unclear, though several people in banking and gaming circles said it’s widely known that Black has been scooping up debt in the entity that runs both the Foxwoods Casino and the nearby MGM Grand at Foxwoods.

The casino — the country’s largest — has been teetering on the brink of default for months, buffeted by a recession that has curbed gambling spending as well as stiffening competition. Last year, in an effort to deal with shrinking profits, the tribe axed hundreds of Foxwoods employees, and cut benefits for tribal members, including their pay.

Earlier this month, the tribe announced it had elected Rodney Butler as chairman of the panel that runs the casinos, replacing Michael Thomas, who got ousted amid the financial turmoil.

Because Foxwoods is tribally owned, Black as an outsider would not be able to take outright possession of the casino, which sits on tribal land, is protected under the Indian Gaming Regulatory Act and must remain owned by the tribe. The situation is particularly tricky because tribal law, not US bankruptcy law, will prevail if the casino owner defaults.

However, that won’t stop Black from being able to exert considerable influence over the tribe as it negotiates with creditors, sources said.

Apollo and the tribe declined to comment.

Black’s interest in the gaming sector runs deep. His Apollo, along with two other private-equity firms, bought Harrah’s in January 2008 for $27 billion. But while under Apollo’s ownership Harrah’s has cut costs, the casino company owes nearly $18 billion and itself is struggling to remain in compliance beyond 2010 with its loan terms.

In September, Harrah’s — the nation’s largest casino chain — bought 16 percent of Planet Hollywood Resorts’ $860 million in debt in what observers at the time said could be a precursor to a takeover attempt.

With owning Foxwoods off the table, sources said Black might be able to get the next best thing: a marketing partnership between the Connecticut casinos and Harrah’s, under which Harrah’s customers could enjoy the same benefits at Foxwoods that they get at Harrah’s casinos.

Such a pact would get Harrah’s into Connecticut, where it doesn’t have a presence, while at the same time help drive traffic to Foxwoods, which has gotten hammered by an onslaught of competition from nearby Mohegan Sun and gambling spots in New York. josh.kosman@nypost.com