Now that the Connecticut legislature has given the go-ahead for the tribal MMCT Venture to build a Class III 0 million satellite casino in East Windsor, construction could begin in the fall. The only thing that remains is for Governor Dannel Malloy to sign S.B. 957—which he has said he will do.
The passage of the bill is the culmination of a two-year full court press by the tribes to convince the legislature to allow them to build a third, commercial casino in the state. The purpose is to keep the MGM Springfield from draining away the $266 million the tribes pay the state each year.
Last week the Hartford Courant reported that MMCT Venture, a partnership between the Mohegan and Pequot gaming tribes, is finalizing designs for the casino. Kevin Brown, chairman of the Mohegan tribal council, exulted “We’re off and running,” and predicted that regulatory approvals for the off-reservation casino would happen rapidly.
The objective is to transform a now defunct cinema complex, the former Showcase Cinemas, into a medium-size casino.
The Mohegan Tribal Gaming Authority operates the Mohegan Sun while the Mashantucket Pequot Tribal Nation run Foxwoods Resort Casino just a few miles away. The erstwhile rivals joined forces in 2015 to push for a third casino to shield their interests against the $950 million MGM Springfield, which is rising 14 miles from Hartford, and is planning a fall 2018 opening.
Proving as a good as its word, MGM Resorts International went to federal court to challenge the law, and might be joined in the lawsuit by the Schaghticoke Tribal Nation (STN), a non-federally recognized tribe that has lobbied for the right to build its own casino. MGM is financially backing the tribe.
Uri Clinton, MGM’s senior vice president and legal counsel said MGM would “continue to vigorously advocate in the courts as we seek to protect the constitutional rights of any company hoping to do business in Connecticut” adding, “And that, ultimately, is what our goal has always been: we’d like the chance to compete to do business in Connecticut.”
MGM backed one of two competing bills and its bill lost. The bill that won allows the tribes to build a casino in East Windsor. The bill that failed would have opened the process to anyone, including commercial interests.
Clinton commented on the passage of the bill his company opposed: “Connecticut missed an enormous opportunity to put in place an open, transparent and competitive casino process, which could have resulted in as much as $1 billion in economic development, the creation of thousands of jobs and a licensing fee paid to the state of up to $100 million.”
MGM is already in court attacking the original legislation from 2015 that authorized the tribes to identify a site for a casino—but did not authorize the casino. MGM’s original case was thrown out of federal court and it awaits a ruling on its appeal to the
2nd U.S. Circuit Court of Appeals.
MGM has argued that it is unconstitutional for the state to award a third casino to the tribes without an open bidding process—a process it has said it would like to participate in.
STN’s Chief Richard Velky agrees with that. “Under the equal protection clauses of both the federal and state Constitutions, STN should have the same right to pursue this economic opportunity as anyone else,” he said last week.
It is unlikely that the lawsuits will stop work on the new casino unless MGM is able to obtain an injunction. Rodney Butler, chairman of the Pequots, declared that his tribe is “fully committed,” to going forward: “we’ve always anticipated that there would be some form of legal action in addition to the current one,” he said.
One thing that must happen before the tribes can move forward is to obtain federal and local approvals, as well as obtain financing.
“We’ve got a few things in the hopper, a few things we have to focus our efforts on to get to the conditions where we can put shovel in the ground,” said Chairman Kevin Brown. “We are positively on a path to do that.”
Brown said the tribes have agreed to pay $30 million in advance tax payments. The state is drowning in red ink, one reason that lawmakers were open to creating a new revenue stream.
Another reason may have been intense lobbying by employees of both casinos in the capitol in the final weeks before the vote. Butler credited that presence: “I think that message resonated with the legislature throughout,” he told the State.
On June 6, the last day of the legislative calendar, the House approved a bill authorizing a 200,000-square foot casino with 2,000 slot machines and up to 150 gaming tables. The state will collect 25 percent of the revenues, the same percentage it collects from the tribes’ original casinos.
One item that was left unresolved is whether to charge the two tribes license a one-time license fee to operate the casino. Suggested amounts for such a license range from $25 million to $250 million, and have appeared in versions of the final bill. The subject remains alive because the state is facing a $2.3 deficit in the two-year budget.
Senate President Pro Tem Martin Looney addressed the issue: “The subject of a licensing fee remains an open question and I believe it should be a matter of discussion during budget negotiations.”
Another lawmaker said that a new casino, “should have a price tag associated with that…all things are still possible for the budget.”
Senator Cathy Osten, disagrees. She considers a large license fee to be a job killer.
“Connecticut is considered one of the best deals with local tribes, and on top of that, they have been paying other ancillary costs,” she said. Osten, co-chairman of the appropriations committee, said that such a fee “would be like saying to Sikorsky, ‘We’re not giving you a tax break, we’re going to charge you more.’…They’re a business that should be treated as fairly as any other business in Connecticut.”
Once Malloy signs the bill authorizing the new casino, he will need to sign an amending tribal state gaming compact between the tribes and Connecticut, a compact that will clarify that the tribes operating a commercial casino will not change their exclusive rights to gaming they are guaranteed in return for paying the state 25 percent of profits.
The Bureau of Indian Affairs will then need to approve of the amended compact, something that Brown says he expects will take about six weeks.
It was probably not a coincidence that the Mohegan Sun’s ballroom held an event that was addressed by Ryan Zinke, secretary of the Department of the Interior: the National Congress of American Indians.
Mohegan Chairman Kevin Brown declared, “It was really monumental to see the state of Connecticut’s governor Dannel Malloy stand with the secretary of the interior particularly in the shadow of this agreement that we’ve struck with the state to build a third casino.”
Malloy commented that a recent letter of “guidance” by the Bureau of Indian Affairs was something he considered when deciding to support the bill. “I don’t think that without the advisory opinion from the BIA to begin with, I don’t think the legislature would have sent that package to me and so you know I think those two things are very much linked,” he said.
Many tribes view Zinke with skepticism due to proposed budget cuts to the department, but none of that was on display as Zinke addressed the congress. The former Navy Seal pledged to establish a relationship based on respect and consultation with the tribes. “My pledge is to work with you, partner with you and be your advocate and fix a system that is broken,” he said.
At Zinke’s side, or at least in his orbit, was his acting deputy, James E. Cason, whose “guidance letter” to the tribes helped reassure lawmakers that the third casino would not violate the existing compact.
Cason commented, “It was a simple matter.”
Brown echoed that sentiment. “That’s exactly right,” said the chairman. “That’s what make this conversation so frustrating to me, because anyone who is truly in a position of authority on this matter doesn’t understand all the hoopla, which should be a signal or message all itself.”
Brown, who served in the U.S. Army as a colonel in Iraq, was part of a delegation of former servicemen who presented Zinke with a “veterans’ blanket.”
Brown declared, “This is a very historic time for the Mohegan and Pequot Tribes, two tribes that were once one in the early 1600s, two tribes that have competed against each other, combatted each other, separated from each other and competed on the landscape of gaming nine miles apart with two casinos of nearly equal size, two of the largest casinos in the western hemisphere.” He added, “We are now joined together again as tribes, as a family and as business partners in a venture to build a third casino in the state of Connecticut, a commercial venture off reservation.”
In a separate but related development, the Connecticut Senate by a vote of 22-14 approved a bill that expanded the number of off-track betting facilities (OTB) from 15 to 24. All locations would be subject to state and local approvals. This bill was one of the “sweeteners,” that harvested enough votes from fence-sitting lawmakers to push the casino bill over the top, with votes to spare.
Ted Taylor, president of Sportech, which operates several OTB venues in the state, applauded the legislation but suggested that “more works needs to be done,” to save 400 OTB jobs from the MGM Springfield.
