Senate Bill 957, that would allow Connecticut’s two gaming tribes to build a third, satellite casino in East Windsor, near the state line with Massachusetts, has cleared the General Assembly’s Appropriations Committee by a 33-13 vote, sending it to the Assembly floor.
The bill is being pushed by the Mashantucket Pequot and Mohegan tribes and their joint development authority MMCT Ventures.
Senator Cathy Osten, co-chairmen of the committee, said after the vote, “This was an important vote today because the Appropriations Committee members clearly recognized the value of saving jobs in Connecticut, jobs that are in most every city and town in the state,” adding, “There are 140 communities in Connecticut that send 12,000 employees to work in the gaming industry every day. … Today’s vote was a vote to stop MGM from destroying Connecticut jobs.”
A rival bill, House Bill 7319, would create a competitive bidding process for a third casino.
Mohegan Tribal Council Chairman Kevin Brown hailed the news: “Another week, another milestone passed. It’s clear that Connecticut’s elected leaders understand that real people are going to lose their jobs if we don’t stand up and compete to save them. We want to thank the members of the Appropriations Committee for their support.”
The bill dodged several amendments that would have mandated a referendum in East Windsor, $500,000 annual payments to surrounding towns, and share of the revenues set aside to assist racetracks and off-track betting venues.
The tribes, formerly bitter rivals, own the Foxwoods and Mohegan Sun casinos. The purpose of the third casino is to try to prevent the MGM Springfield, now being built 14 miles from Hartford, from draining away millions of dollars and thousands of jobs. Obviously, it won’t prevent some loss, but they hope to blunt its effects.
Meanwhile the Schaghticoke Tribal Nation, which is not a recognized federal tribe, is demanding a piece of the action. It is urging that the legislature not give the two tribes a monopoly on a third casino, but instead open up the process to competitive bidding.
Chief Richard Velky commented last week: “The two tribes, being federally recognized, most certainly have the right to have gaming on their reservation and we have no objection to that. But once they leave the reservation, it should become a public bidding process anyways and it should be a fair one.”
His tribe supports a rival bill that would require the state to develop a process and issue an RFP (request for proposals) for a business or tribe to develop, manage and operate a casino in the state.
The Schaghticoke support building a casino in the southwestern part of the state, such as Bridgeport. They claim they could tap the New York market and possibly generate more money for the state than the proposed third casino in East Windsor. The tribe tried to get federal recognition 13 years ago—and met with initial success—only to have the decision reversed by the Bureau of Indian Affairs. The tribe says it has the financial backers to make a casino bid viable.
A contingent of 40 members of the tribe made a lobbying visit to lawmakers last week. Velky commented, “Anywhere in Fairfield County, preferably for me, probably be Bridgeport. We have always show an interest in Bridgeport. Bridgeport has always shown an interest in the Schaghticoke.”
He added “You’re tapping into the New York market, 50 miles outside of Manhattan.
Our tribe stands ready, willing and able to compete for the right to offer commercial casino gaming in southwestern Connecticut — all we need is an open process and a pathway to compete, which this bill gives us.”
However, the tribes last week released a study by New England gaming market expert Dr. Clyde Barrow that claims that a competitive bid process would cost Connecticut $85.6 million because it would break the existing tribal state gaming compact, releasing the tribes from their requirement to pay 25 percent of their profits to the state.
The Schaghticoke-backed bill would pay the state 35 percent of all gaming revenue from a third casino. They claim this would make up for the money the state would lose by breaking the state tribal gaming compacts by allowing a commercial casino.
Barrow disagrees. He wrote: “There is no math that makes Connecticut’s first commercial gaming enterprise work for the state if it’s not operated by the two federally recognized tribes.” He added, “For the State of Connecticut to merely break even in terms of state revenue, a competitively bid third casino would need to generate $1.063 billion in gross gaming revenue annually. There is not a single commercial casino in the United States generates that level of gaming revenue.”
Meanwhile House Speaker Joe Aresimowicz upped his odds that some sort of third casino bill would pass the legislature. He told reporters, “We’re getting close to around 65 to 35 that there’s going to be expanding gambling within the state of Connecticut bill as part of a budget or stand alone bill this year.” Those are much better odds than the speaker gave the bill just a week ago.
He added that the bill might be part of a budget solution for the state.
Senator Paul Formica added his support, telling News 8: “We’re all on the same side of jobs and what you think about casino gambling aside, they’ve proven to be great community partners, great providers and great economic activists for our state.”
Senator Cathy Osten agreed: “It saves jobs in our area. We have 12,000 jobs that are in Eastern Connecticut, actually 140 towns send workers down to the casinos.”
Since the MMCT Venture-backed casino is aimed at undercutting the effect the $950 million MGM Springfield will have on Connecticut gaming, MGM has been fierce in its opposition, both in the courtroom and in the cloakroom, where MGM lobbyists have pushed hard for the option of opening up a third casino to a commercial bid, which it could theoretically compete for.
MGM has called the process so far secretive and anti-competitive. It also attacked the lack of a provision to give the residents of East Windsor a referendum on hosting a casino. It is also giving financial backing to the Schaghticoke
MGM and MMCT have set up dueling websites, which trade barbs and accusations. MMCT upped the wattage last week by posting a digital ad criticizing the executives of MGM as trying to draw money away from Connecticut and into the Bay state.
The digital ad uses video clips the tribes found of MGM executives talking about their plans to aggressively seek gaming money from Connecticut. MGM President William Hornbuckle is shown saying “We are ideally positioned to go into Hartford and attack.”
MGM quickly went on the counterattack, with Uri Clinton, senior vice president and legal counsel at MGM declaring, “What MMCT did this evening is what a campaign does when it is losing, it attacks,” adding “And while it is kind of sad to see, it is also understandable why they are losing.”
Connecticut Governor Dannel P. Malloy alluded to that last week when he told reporters: “MGM is in the building because they know they got a great deal in Massachusetts, so that they can compete for Connecticut dollars. They know it, and they don’t want that to happen in East Windsor. That’s why they’re in the building. Let’s not argue that they’re the defenders of commerce. They’re not. They want their exclusive piece of the pie, based on the casino in Springfield.”
Malloy is pressing lawmakers for a budget deal, without which he has threatened 4,200 layoffs in more than 50 departments with the goal of saving about $400 million annually.
The tribes chose East Windsor and the site of the former Showcase Cinema, which is now vacant, after a search that began in December of 2015 and which once included the communities of East Windsor, South Windsor, East Hartford, Hartford and Windsor Locks as competitors. Later that group was culled down to East Windsor and Windsor Locks.
The tribes have been frank that their purpose was to blunt the effects of the MGM Springfield and save 9,300 jobs. The state’s Office of Fiscal Analysis has projected that the MGM Springfield could be an annual $68 million drain on state revenues. Last year the tribes pay $267 million.
MGM sued in federal court shortly after the legislature authorized the tribes to begin the process. MGM’s attorneys argued that the bill violated the U.S. Constitution’s Equal Protection Clause as well as the Commerce Clause. This suit was dismissed in federal court, but is under appeal.
One of the memes MGM has been pushing is the idea that if the tribes are given the rights to operate a commercial casino that this would violate their tribal state gaming compacts, which grants exclusivity to the tribes from commercial competition. So, as the theory goes, the tribes would violate their own compacts by competing against themselves.
That possibility was first raised by Connecticut Attorney General George Jepsen in an opinion that was requested by Governor Malloy.
The tribes have pushed back against this Catch 22 interpretation. Chairman Kevin Brown last week said the tribes are expecting to get a letter from the Bureau of Indian Affairs giving assurances that the off-reservation casino would not jeopardize the existing compacts—especially the 25 percent the tribe pays the state. Brown added that the BIA can’t give any binding decision until the legislation is actually passed.
MGM is also highly critical of an amendment proposed for the bill that would give a tax break of ten years to a tribal casino in East Windsor. It would exempt the casino from being assessed on taxable “personal property” such as business equipment. That’s five years more than the deal that the tribe initially worked out with the town. If this is in included as part of the bill, the Board of Selectmen of East Windsor would still have to approve it.
The town would still get plenty of money from the tribes: $8.5 million in yearly payments—on top of the $300 million that they propose to spend building the casino.
MGM jumped on this proposal as being “amazing” in light of the state’s budget problems, “at a time when legislators are considering raising taxes on Connecticut’s residents and slashing aid to cities and towns,” said Uri Clinton.
Clinton added, “It’s especially ironic that one casino operator is seeking a tax break when there are simultaneously several casino operators, including MGM, that would welcome the chance to contribute tens of millions of dollars to a host town and the state of Connecticut.” He then called on the legislature to pass the MGM-backed bill.
Clinton continued, “This is what happens when you have a closed process that favors one developer,” he said. “At a time when Connecticut is facing a fiscal crisis, the latter sure seems the better, smarter, more lucrative path to take.”
Senator Timothy Larson, who authored the amendment, said that no state money would be used. It would only happen, he said, if the town agreed. He told the Journal Inquirer: “Any deal that is constructed between the tribes and the town is between the tribes and the town. All of that would have to be agreed upon by the town.”
