While not exactly cheering from the sidelines, MGM Resorts International, which is building the 0 million MGM Springfield is giving some support to anti-casino forces that have coalesced across the border in Connecticut.
The anti-gaming activists who have coalesced to oppose a third tribal casino in the state met last week in East Windsor, where the MMCT, the development arm of the tribes, has announced as the community where the casino will be built—if the state approves.
They have formed the Coalition Against Casino Expansion in Connecticut, which emphasizes the “social and economic costs” of gaming. Former Congressman Robert Steele gave the keynote talk at the meeting. Steele wrote “The Curse: Big-Time Gambling’s Seduction of a Small New England Town” after he left Congress.
He told the crowd, “Gambling addiction more than doubles within 10 miles of a casino. Gambling addiction leads to a host of economic and social problems including debt, bankruptcy, broken families and crime.”
Among some of the 12 reasons the organizers gave for opposing a casino were that gaming “leads to debt, bankruptcies, broken families, and embezzlement,” and a casino “is dependent upon preying on people.”
The tribes, the Mohegans and the Pequots, own, respectively, the Mohegan Sun and Foxwoods. They hope to build a third, satellite casino, near the border with Massachusetts to blunt the effects of the MGM Springfield, which is rising 14 miles away from Hartford.
MMCT proposes to spend as much as $300 million for a casino with 2,000 slots, up to 150 gaming tables, eateries, retail shops and entertainment space.
MGM is fiercely fighting against this effort, both in federal court, and perhaps more fruitfully, with a full-bore lobbying campaign in the legislature, where MGM has been selling the idea that the state would benefit more from a commercial casino in different part of the state, one where MGM could compete for the license.
Specifically, MGM said a casino in Bridgeport, in the southwest corner of the state, just outside of New York City, would do better than the tribal casino. With a tax rate of 30 percent to 35 percent, a spokesman said it would produce enough revenue to offset the “Pequot Fund,” which consists of payments made by the tribes to the state.
MGM has long supported the Schaghticoke Indians in Kent, who have wanted to build a casino in Bridgeport for years, but the tribe has not achieved federal recognition. Kevin Brown, the Mohegan chairman, called the MGM proposal a “red herring.”
The anti-gambling group weren’t the only ones meeting about the issue. So was the East Windsor Board of Selectmen, which hosted a forum the same week.
Residents of East Windsor, which has a population of 11,500, are divided on the issue of a casino in their midst.
Brianna Stronk, who helped organize the meeting of anti-casino activists in the town, told Fox 61she is collecting signatures to force a local vote. “If the town comes out and votes, and they vote in favor of a casino then so be it. But then at least we got to have a voice on something that is so monumental to this little town.”
Her side needs about 300 signatures to force an election, and claims to have already collected 200.
East Windsor Selectman Jason Bowsza counters that the town has already signed a binding contract with MMCT, something that the board approved unanimously. The agreement stipulates that the casino would be located at the long-vacant Showcase Cinemas property.
“We’re acting in what we think is in the best interest in the community,” he told Fox. “There are going to be those, like in any issue, that would disagree with that but we’re excited to move forward.” He cites jobs and revenue as the main inducements.
Marie Esousa, who attended the anti-gaming meeting, felt her views were not given enough respect. “I was cut off. At the meetings I attended everybody had an opportunity to speak without being shut off and this time it was one sided and that’s unfortunate, people are here to learn both sides of what’s happening.”
Selectman Steve Dearborn, who also attended the meeting, was not allowed the finish speaking when he tried to explain that the vote would cost the town over $4,000, and would not be legally binding on the council.
The tribes and the town signed an agreement on March 2. At the signing Brown declared, “I’m here to tell you the sky is blue. Tomorrow, MGM will tell you all the things we told you today are not true and the sky is purple.”
Mashantucket Pequot Chairman Rodney Butler added, “MGM will do whatever they can to generate whatever shareholder revenue they can, even if it means crippling a celebrated Connecticut industry. They would love to see us give up instead of fighting back. But we’re not going to do that.”
Under the agreement East Windsor will be paid $3 million upfront plus $3 million per year.
That doesn’t mean that the casino will happen. It still faces a series of public hearings, oversight and approval by the legislature, which includes both houses, and a signature from the governor.
The first to take testimony will be the General Assembly’s Public Safety and Security Committee, which was scheduled to begin last week. The committee, which oversees gaming in the state, invited representatives of the tribes to make a presentation.
The committee will actually be considering two competing bills. One is the bill favored by the tribes, for a casino in East Windsor. The other would allow competitive bidding for a third casino.
Committee Chairman Rep. Joe Verrengia commented “It is important that we have the two competing bills introduced to begin the public discussion with respect to the expansion of gaming.” He added, “These are the two issues at the root of whether or not it is in the best interest of the state to expand gaming. I want to get a bill out of the committee to let the full House and Senate decide. It deserves the attention of the full legislature.”
The co-chairman of the committee, Senator Timothy Larson, reiterated his support for the tribal proposal. “There was some sense from the public safety committee that there had to be a second option,” he said. “In the interest of moving this along, I didn’t want to create any logjam. People will be able to come to a public hearing with another option.”
The committee has until March 16 to meet the deadline for forwarding bills to the House and Senate.
Asked to comment on the competing bill MMCT spokesman Andrew Doba instead said, “As we’ve said from the beginning, our project will save thousands of Connecticut jobs and millions in state revenue.”
Meanwhile MGM is pursuing its federal court case against the state, which it accuses of violating the Equal Protection Clause of the U.S. Constitution. It doesn’t question that the tribes can operate on their reservations with a monopoly. But when they venture off the reservation, MGM challenges of the legality of granting them a monopoly, without opening the bidding for such a casino license to other gaming companies—such as MGM.
Governor Dannel Malloy, who has always played his cards close to the vest on this issue, last week requested that Attorney General George Jepsen issue a formal opinion on the proposal—and his opinion whether the state would be able to defend it successfully against MGM.
Two years ago, the AG warned that a challenger would have a strong legal case. Besides possibly violating the Equal Protection Clause, it might also violate the Commerce Clause, Jepsen said at the time.
Malloy also asked Jepsen to opine on the possible impact of the proposed legislation on the state’s revenue sharing agreement with the tribes. The state tribal gaming compact, negotiated 20 years ago, commits the tribes to paying 25 percent of gaming revenue so long as they are guaranteed exclusivity. Currently the tribes pay the state about $200 million a year. Would that payment be threatened if a commercial casino is built by the tribes themselves, rather than a non-tribal casino developer? That’s the question Malloy has asked Jepsen to address.
Last year the Bureau of Indian Affairs issued a non-binding opinion that the third casino would not impact the compact. That doesn’t guarantee that the Trump administration would hold the same opinion.
Malloy’s chief of staff and legal counsel later met with lobbyists for MGM who presented a legal opinion from former Interior Secretary Kenneth Salazar, who now works for MGM, that the MMCT would threaten the compact. Salazar was running the Interior Department, which oversees the BIA—which issued the opinion he is now arguing against.
Salazar wrote: “In my opinion, there is a significant chance that such a review (even if it did not produce an outright termination of the 25 percent revenue entitlement) would lead the Department to require a reduction of the 25-percent royalty provision in the current compact,” he wrote. “That is because the 25-percent rate is unusually high. In fact, it is higher than the rate in the overwhelming majority of Indian gaming compacts and the Department has repeatedly disapproved even lower rates.”
He also wrote: “Scrutiny of the 25-percent rate is particularly likely given the length of time since that rate was adopted (two decades) and the changes in the marketplace that have occurred in that time. In addition, it is important to bear in mind that the Mashantucket Pequot royalty agreement has never been reviewed or approved by the Department.”
MMCT spokesman Doba dismissed that opinion: “First they paid former Attorney General Eric Holder. Then, they paid former Sen. Joseph Lieberman. Now, they’re paying the former interior secretary,” he said. “What does it add up to? That MGM is willing to pay anyone and everyone to stop our project from moving forward because they know our proposal is going to keep jobs and revenue in Connecticut.”
The tribes have said they would be willing to amend their compacts to stipulate that they would continue to pay the 25 percent.
