Former U.S. Department of the Interior Ken Salazar, hired by MGM Resorts to represent it, warned Connecticut Attorney General George Jepsen in a letter last week that an effort by members of the legislature to bypass approval by the Bureau of Indian Affairs of a revised compact between the state and its two Indian gaming tribes would be fraught with legal perils.
The Mohegan and Pequot tribes, which operate the Mohegan Sun and Foxwoods, were authorized by the legislature to build a $300 million casino in East Windsor as a bulwark against attacks to their two casino’s profits by the $960 million MGM Springfield, which will open in less than a year 14 miles across the Massachusetts/Connecticut state line.
Salazar claimed this could cost the state $500 million. The two tribes, the Mohegan and Pequot tribes, quickly called Salazar’s claims “false” and a “lie.”
Salazar wrote to Jepsen, “In my view, this approach creates a substantial risk to the hundreds of millions of dollars that Connecticut receives annually from the tribes pursuant to their current compact and procedures.”
The former Interior secretary alleged that some members of the legislature were trying to insert language in the upcoming budget that would remove the tribe’s requirement to get approval from the BIA of the change to the compact which was made to allow the tribes to operate a commercial casino.
He wrote, “In particular, the tribes may seek to have Public Act 17-89 and the amendments themselves changed so that state authorization for the casino no longer depends on Interior’s approval of the proposed amendments.”
Andrew Doba, spokesman for MMCT Venture, the joint authority of the two tribes, denied this accusation.
“Reports of a ‘fix’ for the East Windsor casino in the budget are completely false,” he said. “The fact is that we don’t need one. Federal law makes it clear that if the Department of Interior (DOI) does not reject an application, it is deemed approved.”
The Indian Gaming Regulatory Act (IGRA) does make allowances for a compact to be “deemed approved” if the BIA neither approves or rejects it. In fact, every compact currently in force New Mexico was “deemed approved.”
Doba added, “They know we don’t need a legislative change, and all the letters in the world from Mr. Salazar don’t change that fact. If they’re willing to lie about something as basic as this, why should anyone take them at their word on anything?”
Jepsen has warned the legislature that it was jeopardizing the state’s revenues from the two existing tribal casinos if it tried to get around direct approval of the compact by the Department of Interior. The BIA is part of the department.
A spokesman for the AG said last week, “We have consistently warned against proceeding with a jointly owned tribal casino off of tribal land without first having approval from the Department of Interior,” adding, “We continue to think doing so poses grave potential risks to the state of Connecticut.”
MGM and the two tribes have been engaged in an increasingly bitter war or words both in and out of the courtroom, as well as in the halls of the state capital. Earlier this year the legislature authorized the tribes to build a third casino, but they included the requirement that the Bureau of Indian Affairs sign off on an amendment to the state tribal gaming compact with the tribes, which guarantees their gaming monopoly.
So far, the BIA has done nothing but muddy the waters. In May, a BIA official wrote a letter that stated he saw no reason that the East Hartford casino would violate the compact or alter the tribe’s responsibility to pay 25 percent of their gaming revenue to the state.
However, in September, Acting BIA Secretary Michael Black wrote, “there is insufficient information upon which to make a decision as to whether a new casino operated by the tribes would or would not violate the exclusivity clauses of the gaming compact.”
The tribes moved quickly to provide more information and demanded that the BIA make a ruling in 45 days. That deadline passed this week without a statement from the BIA.
This prompted the tribes to instruct their attorneys to insist to the BIA that it has no choice but to approve their compacts.
They wrote: “IGRA allows the Secretary only two options once a compact has been submitted for review — he must either affirmatively approve, or affirmatively disapprove, within 45 days of receipt,” adding, “IGRA further requires that if the Secretary neither approves nor disapproves a compact, it is deemed approved to the extent it is consistent with IGRA 45 days after its submission to the Secretary.”
A spokesman for the department said that Secretary Ryan Zinke does not believe his approval is necessary.
Before they wrote the letters; representatives of the tribe and sympathetic members of the congressional delegation appealed directly to the department. A failure to decide for the tribes is a de facto siding with MGM.
Currently MGM is conducting the war in the court of public opinion as it coordinates a publicity blitz on a $700 commercial casino it has proposed for Bridgeport, despite the fact that lawmakers have shown no interest for such a facility.
In his letter to Jepsen, which was of course intended just as much for the general public, Salazar reminded the AG that he had warned Governor Dannel P. Malloy that the requirement that the tribes pay the state 25 percent of their tribal casino revenue only remains in force as long as the state does not allow “any other person,” meaning a commercial operator, to operate a casino in the state.
Salazar contends the “any other person” includes the tribes themselves, because they seek to operate a commercial, non-tribal casino in East Windsor. That continues to be a risk, he wrote, as long as the Interior Department does not give its approval to the amendment to the compact that allows it. A promise by the tribes that they won’t enforce that provision is not enforceable, he wrote.
It will remain unenforceable without Interior’s express permission, he said. “Attempts to circumvent the requirement of federal approval would only endanger Connecticut’s revenue stream.”
U.S. Senator Richard Blumenthal, is the former state attorney general who created the tribal state gaming compact that the tribes currently operate under. He is on the side that says no action by the BIA is needed for the compact to remain in force.
He declared last week that Zinke, “has an obligation to approve the amendment,” adding, “But I also think that the absence of disapproval, if a court were reading it, could be argued as deemed approved.”
Although it is unlikely that MGM can permanently hold up the tribes from opening their East Windsor satellite casino, the longer it can delay them, the longer it will take them to try to open around the same time the MGM Springfield opens.
MGM is likely prepared to renew its courtroom challenges if the BIA doesn’t issue a definitive ruling in the case of the third casino.
If, for whatever reason, that third casino loses viability, there are plenty of residents of Bridgeport who would like to see the focus move to them.
Dan Haar wrote last week in the Hartford Courant: “Bet on this: Without some kind of negotiated settlement, no one will wager a dime inside a commercial casino in this state, whether in East Windsor or Bridgeport, in the next five years. The legal fight could take longer than it did to execute a convicted killer before Connecticut gave up trying.”
