The Connecticut Senate last week joined the House of Representatives in approving, by a vote of 27-8 amendments to the state tribal gaming compacts with the Mohegan and Mashantucket Pequot tribes, which will allow them to go forward with their proposed 0 million satellite casino on non-tribal land in East Windsor—providing that the federal government gives the need to the changes.
Now the compacts will be forwarded to the Bureau of Indian Affairs, which has 45 days to determine if they are within federal law.
Governor Dannel P. Malloy had already signed the amended compacts. In his signing statement the governor said, “Over the years, our state has maintained a longstanding partnership and compact with the Mohegan and Mashantucket Pequot tribal nations.”
The two tribal chairmen expressed their appreciation.
“Once again, state legislators have stood up to defend Connecticut jobs and revenue,” said Rodney Butler, the Mashantucket Pequot chairman. “We want to thank the House and Senate and the governor for approving these changes and doing the right thing for the state.”
Kevin Brown, the Mohegan chairman added, “We’re confident that the BIA will follow in the steps of the General Assembly, and that work will get underway very soon.”
The compacts allow for the casino to be located in East Windsor, near Interstate 91, in an abandoned cinema complex. The tribes will pay 25 percent of their revenues, the same rate that they pay for the Mohegan Sun and Foxwoods casinos. Each will also pay $1 million as a down payment.
During the just completed battle leading up to the adoption of the third casino legislation, the concentration of lobbyists in the state capitol representing MGM Resorts International and its rivals the Mashantucket Pequot and Mohegan nations, made it look, like one lobbyist describe it, as a scene from a crime movie.
The two sides spent a total of $3.2 million on lobbyists, with MGM spending $2.1 million.
MGM hired lobbyists and a former U.S. attorney general, Eric H. Holder Jr., and paid $900,000 for TV and digital media, all with the goal of preventing the legislature from authorizing the third casino, or possibly delay it as long as possible to reduce its threat to the MGM Springfield, which is scheduled to open in the autumn of 2018.
Tom Swan of the Connecticut Citizens Action Group, compared MGM’s big play to a game of blackjack. He told the Connecticut Post: “MGM gambled that hiring more and more lobbyists would work to their advantage — but they went over 21.” They were unable to convince many that their call for an “open, competitive” process was anything more than an attempt to keep money in Springfield.
MGM spent a lot of money because it stands to lose a lot of money. One estimate is that the third, satellite casino, could drain as much as $20 million from the $950 million MGM Springfield. One the other hand, the tribes pushed for the casino because their own estimates showed them losing possibly hundreds of millions of dollars to MGM if they didn’t take the defensive measure.
The common enemy pushed the Pequots and Mohegan tribes, once implacable gaming rivals, together by necessity. The good will generated by the tribes among lawmakers, and the last-minute decision by Governor Dannel P. Malloy to support the tribal casino in East Windsor, pushed it over the top.
Up until Malloy’s announcement, MGM felt that it was winning the public relations battle.
For example, it had its own Indian tribe, the Schaghticoke Tribal Nation of Kent, which argues that it should be allowed to operate its own casino close to the state’s boundary with New York state.
The lobbying effort for MGM was handled by Global Strategy Group, which was paid $1,477,688 according to state filing records. The two tribes spent $875,4000, of which the firm of Stu Loeser & Co., LLC was paid $137,924 and hired Andrew Doba, former spokesman for the governor.
Another lobbyist they hired, a former state representative, Peter Smith, told the Post, “The tribes have a long-standing partnership with the state, and they understood the Springfield casino would have a significant impact on Connecticut.”
Over 25 years the tribes have paid $8 billion to the state in revenue sharing. The estimate that 9,000 jobs might also be lost was also a factor for many lawmakers.
As Smith described it, “To mitigate that impact, we brought some ideas forward to protect the Connecticut jobs and revenue. Nothing precluded MGM from doing the same thing, picking a site in Bridgeport or Fairfield County and making a proposal. The more money they spent hiring lobbyists, bringing in high-profile names from Washington, TV ads and other things, it reinforced the fact that they were just protecting their investment in Springfield.”
Another lobbyist the tribe hired added, “Saving jobs is not a partisan issue. It’s a Connecticut issue and a human issue. Secondly, we wanted to keep revenue in Connecticut. That was our focus, and it took time to educate and to explain how MGM Springfield was going to impact our state and our jobs.”
Now that the tribes have won in the legislature, MGM will shift its efforts to killing the law in federal court. It will argue that the state legalized commercial gaming without voter approval and authorized a commercial casino with a competitive bidding process.
It has already lost one effort in federal court, and has appealed that. It is likely to challenge the new law with a new lawsuit, bringing up constitutional questions that didn’t necessarily apply when the law merely authorized the tribes to identify a site for a casino, as opposed to the new law, which authorizes the casino.
MGM may also attempt to lobby the Bureau of Indian Affairs to try to influence its decision on whether the amended compacts jibe with the Indian Gaming Regulatory Act (IGRA.)
The state has no law on its books that allows commercial gaming, which was why amendment the compacts was necessary.
Uri Clinton, who is both MGM’s vice president and general counsel, told the Connecticut Post: “We’ve had a very strong position that legally there are constitutional issues we’re going to be pursuing. Litigation is part of the strategy. We really made a significant investment in trying to get a seat at the table, and we really value access to the New York market if that opportunity presents itself. Some people thought we were just trying to block, but last year we made a significant commitment to the state and we’re planning to engage next (legislative) session.”
