Three weeks after their lawsuit against the Department of the Interior was dismissed in federal court, the state of Connecticut and the Mashantucket Pequot Tribe have filed an amended complaint to force the department to issue a ruling that would allow the Pequots and the Mohegan tribe to operate a commercial casino in East Windsor.
The amended complaint was filed against Interior and MGM Resorts Global Development LLC, alleging that Secretary Ryan Zinke’s lack of approval of amendments to the tribal state gaming compact was a result of “undue political pressure” exerted by Senator Dean Heller and Rep. Mark Amodei, both of Nevada, on behalf of MGM, which is based in the Silver State.
For months, says the complaint, the department told the tribe the amendment to the compact would be approved. The amendment is required under Connecticut law for the tribe and its partner, the Mohegan Tribe to build the state’s third, satellite casino. The legislature amended the revenue-sharing part of the compact because the third casino would be the first off tribal land and it would be a commercial casino. The amendment must be approved by the Department for the compact to be legal under the terms of the Indian Gaming Regulatory Act.
According to the complaint “In response to the extraordinary political pressure placed on department officials, principally by Senator Heller and Congressman Amodei, the department abruptly reversed over 17 months of assurances to the tribes . . .” It also asserts that President Trump applied pressure to Zinke. The amended filing notes that Heller and Amodei were CC’d on a letter sent to the tribes informing them that the amendment would not be approved.
The lawsuit argues that the Interior Department was obliged by the department’s own rules to act on the proposed changes within 45 days of receipt, or else it was approved by default.
The tribes, formerly bitter rivals, joined forces in a development authority, MMCT Venture, to jointly operate a casino 14 miles from the MGM Springfield in Massachusetts, as a way to blunt some of the effects of that $960 million casino on the bottom line of the Foxwoods Resort Casino and Mohegan Sun.
MGM has fought this third casino every step of the way, in both the courts, the courts of public opinion and in the corridors of the legislature. They play hard. They don’t give an inch. And, given the results so far, they have been very effective since their casino opened in August, and so far, the tribal casino hasn’t even started construction. Demolition of the former Showcase Cinema building has been completed, however.
Last year, after the legislature had approved of the third casino, MGM was able to drive a wedge between elements of the legislature by proposing a $700 casino in Bridgeport, the state’s largest city. It has accused the state of violating its constitutional rights by not allowing it to bid for the commercial license.
If any commercial casino is built in the state that would void the revenue-sharing portion of the compacts which obligates the tribes to pay 25 percent of their revenue. Theoretically that includes a commercial casino the tribes themselves would operate, which is why the 2017 state law requires an amended compact. The amendment addressed concerns by Attorney General George Jepsen.
Last year the tribes paid $270 million to the state. About a decade ago that amount was $430 million.
When federal Judge Rudolph Contreras dismissed the original suit on September 29, he ruled that the 45-day requirement applies only to state tribal gaming compacts. There was such a compact for the Mohegans. However, the compact between the Pequots and the state was forced on Connecticut by a different process. So, an amendment to it was not subject to the 45-day rule, he ruled.
The amended lawsuit alleges three ways that the department acted improperly. In holding that the two compacts were significantly different, Interior was “arbitrary and capricious” and violates the Administrative Procedure Act. The wording of the compacts is essentially identical, it says. Therefore, the compacts should fall under the same rules. It also alleges improper influence by the Nevada lawmakers, saying that both have gotten campaign contributions from MGM. It adds that Heller has lobbied for MGM “on numerous occasions,” and that during a private dinner in July 2017 that he pressured Zinke to help MGM.
The filing alleges that DOI assistant deputy secretary James Cason told the tribes that “members of Congress were starting to pressure the Department to not approve” the East Windsor casino. “but he also assured the Tribes that the Department had no intent to reverse course.” The department had advised the tribes on September 8, 2017 that it was about to issue approval letters, only to do a 180-degree reversal a week later.
According to the complaint, in spite of “repeated affirmations to the Tribe that the Tribal-State Agreement would be approved and widespread acknowledgment among the Department’s experts that there was no basis to disapprove the Tribal-State Agreement, the Department ultimately buckled under undue political pressure from both Senator Dean Heller (R-NV) and Representative Mark Amodei (R-NV-02),”
The Interior Department’s office of the Inspector General has launched an investigation of Zinke’s role in the East Windsor casino, amidst reports that President Trump is considering replacing the current IG with a political appointment.
Rodney Butler, chairman of the Pequot tribe and interim CEO of Foxwoods, says the East Windsor casino will happen. He was interviewed while he was attending the Global Gaming Expo in Las Vegas. He told Hartford Business that the tribes argue that no federal approval is necessary for them to operate a commercial casino and that the compacts are in force.
The East Windsor casino is meant to slow the hemorrhaging of money out of Connecticut into Massachusetts. However, early figures from the MGM Springfield show that it is not as profitable as originally expected, and it is not having as drastic an effect on the tribal casinos as they had feared. Nevertheless, the East Windsor casino remains an important component in holding that line.
The MGM Springfield recorded nearly $27 million the first month. MGM originally expected more than $1 million a day from the new property.
The tribal casinos’ slot revenues are down for the third month in a row as of September, a 5.2 percent drop from the previous year.
Once the election for Connecticut governor is out of the way, Butler expects the new governor, legislature and attorney general to move quickly on making the new casino a reality and to take action legalizing sports betting. Both would be necessary to keep the state’s gaming industry competitive, said the chairman.
A spokesman for MGM issued a statement saying that the new filing is a “meritless attempt,” to appeal the dismissal of the original suit.
