MGM Resorts International seeks to intervene on the side on the U.S. Department of the Interior in a lawsuit filed by the state of Connecticut and the state’s two gaming tribes
The lawsuit, filed in federal court in Washington D.C. last month, aims to force the Interior Department to certify the amended tribal state gaming compact that allows the Mohegan and Mashantucket Pequot tribes to begin building a third tribal casino, this one in East Windsor. The tribes operate the Mohegan Sun and Foxwoods, respectively. They pay the state 25 percent of their casino profits and have agreed to the same arrangement for the third casino.
MGM says its business is threatened since the satellite casino is aimed at the $950 million MGM Springfield, due to open this fall, and therefore it should be allowed as part of the lawsuit.
MGM’s filing says, “MGM seeks intervention because its ability to do business in Connecticut is directly implicated by the amendments and the relief Plaintiffs seek.” It adds, “MGM has interests in Connecticut, both as developer of a proposed casino in Bridgeport and as operator of MGM Springfield, a casino north of the Massachusetts-Connecticut border, scheduled to open in 2018.”
It argues that the Interior Department can’t represent MGM’s interests, “because those interests differ from Interior’s institutional interests as a federal agency charged with representing the public and with carrying out the United States’ trust obligations to Indian tribes.”
MGM’s lawyers wrote that if the Department approves of the amendments to the charter, as is required by the Indian Gaming Regulatory Act (IGRA) to be legal, it would give the tribes the exclusive right to operate “new commercial casinos without eliminating the State’s right to collect hundreds of millions in annual royalties from Foxwoods and Mohegan Sun — putting MGM’s Bridgeport proposal (and others) at a disadvantage …”
MGM also claims that the department acted correctly in not certifying the amendments because they violate IGRA “by facilitating commercial, rather than tribal, gaming.”
The tribes and the state are opposing MGM’s motion. The Interior Department has taken no position.
Meanwhile, the Pequots are maneuvering financially by realigning its long-term debt to put it in a better position to fend off competition from the Springfield casino as well as MGM’s efforts to persuade the state to open up the state’s largest city, Bridgeport, to a commercial casino. The Mashantucket Pequot Gaming Enterprise announced that it has extended its long-term debt repayment plan to June 30, 2020 and a forbearance agreement with senior lenders to June 30, 2019.
Pequot tribal Chairman Rodney Butler said in a statement last week, “With the reality of competition expanding throughout the Northeast, Foxwoods continues to add a variety of non-gaming and family-friendly offerings in preparation for the imminent changes to come,” Butler said in a statement. “By realigning our Term A obligations and extending our forbearance agreement, we can better ensure that our ongoing plans will be compatible with long-term profitability.”
Meanwhile, in a separate, but related development, the Mashantucket Pequot Tribal Nation held its annual inauguration ceremony last week using a Bible written in the 1600s in the Algonquin language to swear in two new members to the seven-seat tribal council. The new members are Matthew Pearson and Latoya Cluff.
Cluff has worked on the tribe’s Government and Gaming Commission and Pearson has been a board member for the tribe’s business development company.
