The Connecticut legislature’s Public Safety and Security Committee voted 22-3 to move a bill that would expand gaming in the state by allowing commercial bids for a casino somewhere in the state. If it passes both houses and gains the signature of the governor, the state could end up with four casinos.
Unlike the original version of this bill it does not repeal the bill passed last year that authorized the state’s gaming tribes, the Mashantucket Pequot and Mohegan tribes, to build a third, satellite, casino in East Windsor.
That $300 million 200,000 square foot casino is intended to partially deflect the loss of revenue and 9,000 jobs from the Mohegan Sun and Foxwoods expected when the rival $960 million MGM Springfield opens this September in neighboring Massachusetts.
MGM, which has fiercely fought those efforts, backs the bill that would invite bidding for new proposals anywhere in the state. For almost a year MGM has been proposing a $675 million casino in Bridgeport that would tap the New York City market. It has outspent the tribes in lobbying expenditures.
Bridgeport’s Mayor Joe Ganim issued a statement praising the lawmakers who represent the city for championing Bill No. 5305. “This is a casino bill for Bridgeport which also keeps jobs in other parts of the state. It’s an important jobs bill, and Connecticut needs jobs,” said the mayor. “This is a clear signal to the business community that we are open for investment from companies outside of Connecticut who are looking to plant seeds and grow here, and help us develop our new economy. Now let’s push forward for an open, transparent process to bring thousands more jobs to Connecticut!”
The Bridgeport delegation is the largest in the state. The lawmakers jawboned aggressively for their city and threatened to withhold their votes from several bills unless they were accommodated. “We’re going to play hardball,” promised one senator.
Another of those Bridgeport lawmakers, Senator Ed Gomes declared, “Whether East Windsor is in or out, I’m from Bridgeport. MGM offers us 7,000 jobs and 2,000 permanent jobs I’m not against East Windsor or spoken out for MGM. I want all of it. I’m for jobs, jobs for people to make a living and feed their families.”
He added, “It’s Bridgeport’s time. Our people are suffering and we’re going to fight tooth and nail to bring these jobs to Bridgeport.”
The bill creates a framework that would allow commercial casino developers to submit proposals for casinos anywhere in the state. But right now, the only city being talked about for a commercial casino is Bridgeport.
Through its various efforts, including lobbying of the Interior Department, MGM has managed to prevent the tribal casino from getting started, although the joint tribal authority, MMCT Venture, did begin demolishing the vacant Showcase Cinemas in East Windsor to make way for the casino. The celebration of the demolition was attended by 100 tribal members, who heard that the casino will open in two years.
The bill that has moved forwarded represents a compromise that, while not stopping the East Windsor casino, would allow MGM to move forward on its Bridgeport bid. The tribes see the Springfield casino as an existential threat to their two tribal casinos—while MGM considers the East Windsor casino, the first commercial casino in the state, and the first tribal casino built off the reservation, a dagger aimed at its profits.
MGM’s successful efforts to bog down the East Windsor casino by delaying the federal nod of the amendment to the tribal state gaming compact necessary for the casino to operate prompted some lawmakers, such as Rep. Joe Verrengia, to switch their votes from last year.
Verrengia, co-chairman of the Public Safety and Security Committee told the Associated Press: “I’m not willing to wait five years for a decision to come down on whether or not that casino may or may not happen.”
During the debate he had declared, “So, if it’s really about jobs, protecting jobs and protecting revenue, then let’s hit the reset button. Let’s start over and let’s have this open competitive process which would resolve, in essence, some of those potential legal pitfalls that were inherent in the existing legislation.”
Senator Steve Cassano, whose version of the bill was eventually adopted, declared, “I am astounded that in order to do that we’re going to kill another casino. We don’t have to kill this casino to move forward in Bridgeport or somewhere else. What’s wrong with us? Let’s get our act together.”
Senator Tim Larson, the other co-chairman, and a supporter of the tribes, told the Hartford Courant, “After talking to colleagues, it was important for them to at least have the opportunity to vote for it, and I think the repeal amendment that I have in here keeps the process moving forward.”
Mohegan Tribal Chairman Kevin Brown says he believes the casino will happen. At the demolition ceremony he declared, “We’ve been through too much already together to give up. And we’re not going to.”
Connecticut Post Associate Editor Dan Haar calls all the appearance of progress an illusion. “Don’t be fooled. This is a stalemate. The two organizations appear to have the ability to stop each other. The only way either casino will open, at least anytime soon, is through a negotiated deal,” he wrote. “Without more deal-making, we’re not likely to see the open-bidding bill reach Gov. Dannel P. Malloy.”
The kind of deal Haar envisions would allow both the Bridgeport and East Windsor casino to be built, with the amount each pays to the state decided as part of a negotiated settlement. He writes, “For example, MMCT—the Mohegan and Mashantucket Pequot tribal nations—could pay less than the current 25 percent of slot machine revenues to the state. Half might make sense, 12.5 percent. They’d get that break because they would give up their exclusive right to operate in Connecticut in exchange.”
Such a deal might also require that MGM pay a full 25 percent for the privilege of opening in Bridgeport.
Nevertheless, a deal that makes each side less than happy might be the deal that is finally approved. MGM might be forced to swallow an East Windsor casino that eats into some of its customer base along Interstate 91 heading into Massachusetts, while the tribes might have to endure an MGM casino in Bridgeport, tapping some of their customer base in New York City.
Haar also argues that MGM and its allies might prevent the East Windsor casino from actually opening for several years. And until that issue is settled the tribes may have trouble getting the $300 million in financing for the casino. Lori A. Potter, communications chief at Foxwoods, has said that MMCT is still negotiating financing.
However, the main reason why the legislature might ultimately be open to MGM’s bidding is that the tribal gaming contribution to the state has been declining from a high of $420 million ten years ago to about $250 million this year. This decline can be attributed to competition in New York, Rhode Island and Massachusetts since the tribal casinos opened 25 years ago. MGM promises that it can better that amount with its Bridgeport casino, even if the tribes no longer are required by their compacts to pay the state 25 percent.
Earlier this week Connecticut Attorney General George Jepsen issued the opinion that the actions the legislature has taken so far would not immediately violate the exclusivity clause of the tribal state gaming compacts.
The AG submitted written testimony on a number of bills that the Public Safety and Security Committee considered, including Bill 5305. He wrote, “Whether to go forward with the proposed legislation is, in my view, strictly a policy decision. As a legal matter, however, it is my opinion that the proposed legislation would not run afoul of our existing agreements with the Tribes.”
It was at Jepsen’s suggestion last year that the East Windsor law included a requirement that the Department of the Interior write off on the amendments to the tribal state gaming compacts before construction could begin. That clause turned out to be to MGM’s advantage as it was able to allegedly lobby Interior Secretary Ryan Zinke told hold up on the department’s approval of the amendments. At this point the state and the tribes are suing the department to force it to act.
After the committee vote that sent the amended casino bill to the floor of the House and Senate, MGM’s spokesman Uri Clinton released this statement: “MGM will continue to advocate actively for a fair and full opportunity to compete for Connecticut’s commercial gaming license.”
He added, “We continue to believe strongly that the proposal we have developed for a world-class resort casino in Bridgeport, and the thousands of jobs and millions in revenue it would bring to the city, the region and the state is in Connecticut’s best interest.”
Andrew Doba, spokesman for MMCT Venture, fired back, “Let’s be clear: The only people that wanted to pit the supporters of the East Windsor casino against the supporters of a Bridgeport casino was MGM. Now that the provision has been removed, MGM can go back to their shareholders and tell them they weren’t lying when they said that Springfield was their last major development in the U.S.”
MGM insists that it has a development agreement with the developers of the Steelpointe project in Bridgeport, where it has proposed building its casino.
One member of the committee who doesn’t support either MGM or the tribes is Rep. Daniel S. Rovero, who commented, “I listen to all these promises on these jobs in Bridgeport and East Windsor. I think most of it is nothing but pie in the sky, folks, and if we put our hopes in bringing this state back to where it should be in gambling and marijuana, I think we’re in trouble.”
For all the sound and fury occurring in the legislature, it will still require the signature of Governor Malloy to make the bill law—at least until he leaves office at the end of 2017. He has stoutly supported the tribal relationship with the state and said he wouldn’t do anything to jeopardize it.
If it does become law the state would issue a request for proposals from any casino development, commercial or tribal.
