A federal court has dismissed MGM’s complaint against the state of Connecticut that sought to overturn the state law that allows the state’s two gaming tribes to identify a location of a third satellite casino that would compete against the MGM Springfield being built in neighboring Massachusetts.
The U.S. District Judge Alvin Thompson ruled that MGM had no standing to sue, that the Connecticut law did not exclusively benefit the tribes, to the exclusion of MGM and that it was impossible to identify an actual competitive disadvantage to MGM. He wrote that MGM did not “adequately allege an injury” in the suit that it filed in 2015.
MGM earlier this month lobbied Congress to include a stealth amendment to the 2017 National Defense Authorization Act, sponsored by retiring Senator Harry Reid of Nevada and including heavy hitters such as California Senator Dianne Feinstein, that would prevent tribes that have casinos on reservations from also operating commercial casinos in the same state. Reid submitted the amendment on June 8 and on June 14 the Act was passed without the amendment after Connecticut’s Senate delegation worked to block it.
Ernie Stevens, chairman of the National Indian Gaming Association, called out MGM on its attempt. He told the Boston Globe, “We understand that MGM is arguing that participation by Indian tribes in commercial gaming outside of their reservations somehow conflicts with the goals and purposes of the Indian Gaming Regulatory Act. There is simply no basis in the law for such a suggestion.”
In a formal letter sent to the Senate’s committee that oversees Indian gaming, the NIGA wrote, “It has come to our attention that MGM Resorts International is currently seeking legislation that would prohibit Indian tribes from pursuing economic development in the form of commercial gaming outside reservation trust lands,” It added, “We write on behalf of the members of the National Indian Gaming Association (NIGA) to adamantly oppose this unprecedented attack on Indian tribes and their ability to pursue economic development opportunities.”
The tribes that hope to build a satellite casino, the Pequots and Mohegans, have been very open that they are cooperating in order to keep the $950 million MGM Springfield from draining away millions of dollars and thousands of jobs when it opens in 2018. MGM wants to stop that casino from happening.
Andrew Doba, spokesman for the tribes joint venture, MMCT, commented last week, “This is a company willing to spend huge sums of money to get what it wants. Their actions in Connecticut, and now in Washington, make it clear that they are willing to do anything to stop this project. And if they’re successful, there will be more people in Connecticut standing in the unemployment line.”
A study that both tribes funded projected that the tribes would have to cut their operations by 9,300 jobs. Last year Mohegan Tribal Council Chairman Kevin Brown commented, “This process began to preserve thousands of jobs and millions in revenue which will leave Connecticut, the loss of which MGM has repeatedly acknowledged is necessary to make their project in Springfield a success.”
He added, “As members of communities with deep ties to this state, we’re simply not going to let that happen without a fight.”
Alan Feldman, an executive vice president with MGM, responded, “MGM believes that the current attempt by two tribes in Connecticut to operate a commercial casino is anti-competitive and unconstitutional,” adding, “Moreover, it is based on an unprecedented framework that is not consistent with laws governing Native American casinos.”
He added, “MGM has taken issue with the fact that Special Act 15-7 gives the Mohegan Tribe of Indians of Connecticut and the Mashantucket Pequot Indian Tribe an exclusive, no-bid right to develop the state’s first commercial casino on off-reservation land that has not been taken into trust under IGRA.”
MGM has also said it plans to appeal the judge’s ruling. It argues that the law, adopted one year ago, violates the U.S. Constitution’s Equal Protection Clause and the Commerce Clause
Clyde Barrow, an expert on gaming in New England told WAMC/Northeast Public Radio that the resources MGM is throwing into fighting the Connecticut law reflects how much is at stake.
“In their application to the Massachusetts Gaming Commission, MGM’s business plan relies on the ability to capture $200 million-$300 million a year in gross gaming revenue from Connecticut. So, anything that seriously undermines that business plan makes the investment at its current level untenable,” he said. He added, “They are in a bind, there is only so much they can do to make this project financially feasible.”
Foxwoods and the Mohegan Sun remain formidable opponents with very large resorts casinos, noted Barrow. “ If they could capture some of the revenue that would otherwise go off to Massachusetts that would be a substantial amount of profit for them to funnel back into their so-called home facilities.”
In a separate but related development the Connecticut Airport Authority has taken one of two possible sites at the Bradley International Airport out of the running for a proposal to host the state’s third tribal casino. The authority says it won’t propose the casino for its new $225 million transportation center.
According to the authority’s Executive Director Kevin Dillon, said the center’s construction schedule doesn’t fit the timeline for when the tribe would like to open a casino. Dillon said he wants to discuss other sites with the tribe.
Schaghticoke Challenge
The Schaghticoke Tribal Nation, also funded by the MGM, is challenging the Connecticut law under a separate lawsuit.
The tribe has been seeking federal recognition since 1981, but didn’t get a decision until decades later. By that time the state’s two gaming tribes had been operating their large casino resorts for many years and local officials were very worried about the possibility of a third casino opening in the state.
They won recognition in 2004 but then in October of 2005 the BIA backtracked and withdrew the recognition under intense pressure from the state’s congressional delegation and state government.
According to former U.S. Senator Joe Lieberman, who in the Senate was on the other side of this question, “There was a popular response also that Connecticut was changing as a result of the two casinos and the brakes should be put on before other tribes were recognized and new casinos established.”
Lieberman’s law firm now represents the tribe. The state seeks dismissal of the case.
Tribal Chief Richard L. Velky issued this statement last week: “STN satisfies all of the criteria for federal acknowledgement, however it continues to be unfairly denied the benefits of healthcare, housing, educational programs, economic diversification opportunities and, especially, the national sovereignty that is enjoyed by two other Connecticut tribes who have both vowed to me personally that they would not hinder our efforts to reclaim our federal recognition.”
He told the New York Times last week, “We’ve been here 300 years. Whether Connecticut likes it or not, we are one of the state’s first families, and we will continue to be.”
The tribe has about 400 acres on its reservation in the small town of Kent, land that is largely unbuildable. The tribe claims land that includes a school, a power company and the Preston Mountain Club. If the tribe were to gain federal recognition it would be able to pursue land claims against those private entities.
Leiberman argues that the state’s concerns over additional gaming aren’t as strong today as it once was. “We are at a very different time,” he said. “Today, Connecticut is not worried about more casinos in the state. The concern is about competition for the two existing casinos from the new casino’’ being built by MGM.
The 300-member tribe argues that the legislation that allows the Pequots and the Mohegans to pursue a casino unfairly excludes them. Lieberman calls the law “unfair and unjust in general, but particularly to the Schaghticoke Tribal Nation, as a Native American tribe recognized by the State of Connecticut for centuries.”
The recently streamlined process for federal recognition adopted last year by the Bureau of Indian Affairs specifically leaves out tribes like the Schaghticoke by saying that tribes whose applications were recently considered and rejected may not be reconsidered.
Velky says the tribe doesn’t plan to give up.
He told the New York Times, “It’s kind of sad when you say you have to prove your existence. We had to go back 300 years to prove our first encounter with Europeans. It’s not easy when you have an overseer, who is the state, who is overseeing you and fighting against you at the same time.”
