The lawsuit the Mashantucket Pequot tribe of Connecticut and the state of Connecticut filed against former Interior Secretary Ryan Zinke alleging improper political pressure on him to block the tribe’s casino in East Windsor—and which was quashed by a federal judge—will be allowed to proceed against his successor after being amended and refiled.
Judge Rudolph Contreras of the U.S. District Court for D.C. reinstated the case, which is at its core one of illegal corruption. It derives from a law passed two years ago by the Connecticut legislature authorizing the Pequots and their erstwhile rivals the Mohegans to build their $300 satellite “Tribal Winds Casino” in East Windsor to blunt the effect on their market of the MGM Springfield, 14 miles away in Massachusetts. Their efforts have been fought at every level by MGM Resorts International, including, the Pequots assert, in the form of Nevada lawmakers pressuring Zinke to reverse the department’s all but announced decision to approve the amended gaming compact between the tribes and the state they need to build a commercial casino. MGM is a Nevada-based company. The Connecticut legislature included the requirement to ensure that the 25 percent revenue sharing the tribes pay would remain intact.
The initial lawsuit was dismissed in 2018 but Judge Contreras last week allowed the Pequots and Connecticut to add new claims of political interference and refile. This will force Interior to produce an administrative record to explain why it refused to act on the tribe’s request.
The judge agreed that the “vague, cursory reasoning” of the letter the department sent to the tribe didn’t provide enough information to conclude that the decision was based on an appropriate rationale. Judge Rudolph Contreras of the U.S. District Court for D.C. ordered the tribe and state to file an amended lawsuit to force Interior to produce the documents. Contreras is the same judge who dismissed the case last year.
Contreras wrote, “The administrative record or other evidence may ultimately demonstrate that the alleged political pressure did not occur or affect the Secretary’s decision,” Contreras wrote. “But at this stage, Plaintiffs have plausibly alleged that significant political pressure was brought to bear on the issue and the Secretary may have improperly succumbed to such pressure.”
The tribes’ lawsuit alleges that the decision was “arbitrary and capricious” and violates the Administrative Procedures Act. At the last minute Zinke overruled career staffers, according to an investigative report by Politico. It also was able to prove by accessing Zinke’s calendar using a Freedom of Information request that he and Nevada lawmakers were in the same place at the same time just prior to the decision.
The department’s Office of the Inspector General has also been investigating this decision. It interviewed Zinke after he left office in December under an ethical cloud. It also drew the interest of the Justice Department, which is investigating whether Zinke might have lied to investigators.
Zinke has denied any wrongdoing.
The lawsuit could be rendered moot if state Senator Catherine Osten passes her SB 11 that would obviate the requirement for the federal government’s approval of the amended compacts.
Assisting that effort is a group of mayors and first selectmen of the eastern part of the state who are uniting to fight efforts by the Bridgeport delegation to undercut the tribes by promoting an MGM proposed $675 million commercial casino in the state’s largest city in Steelpointe Harbor. MGM’s plans include a 100,000 SF casino with 2,000 slots and 160 gaming tables. It would be a full resort with a 300-room hotel, retail shopping, a 700-seat theater and nearly 61,000 SF set aside for dining.
One of the mayors recently sent a letter expressing “grave concern” to the newly installed Governor Ned Lamont. The mayor said he thought the issue had already been settled when the legislature authorized the East Windsor casino.
“This question has already been asked and answered,” wrote Norwich Mayor Peter Nystrom. “A bipartisan general assembly came to the conclusion that a casino in Bridgeport was not in the best interest of the State of Connecticut.”
Continuing to stir up this issue would just corrode the state’s ongoing relationship with its gaming tribes, he wrote. The Norwich City Council is also considering a resolution opposing any casino proposed by MGM for Bridgeport.
The Bridgeport delegation has introduced a bill similar to one that was defeated last year in the Senate. It would create a competitive bidding process for a casino at a location that would best serve the economic interests of the state. MGM argues that that place is Bridgeport.
This open bidding process is very popular among the general voters of the state, according to poll paid for by MGM.
Bridgeport’s mayor and representatives continue to press the issue. Rep. Steve Stafstrom declared last week, “It sometimes takes a couple of years for legislators to get used to an idea or concept before it can cross the finish line.”
His bill HB 7055, which is similar to one he pushed last year, would “create a competitive bidding process for a resort-casino that would allow the state to choose a development with the most economic impact to the state,” plus create a state gaming commission that would collect bids and decide on one of them.
Stafstrom interprets some remarks by Governor Lamont as indicating that he is open to the idea of more commercial casinos that are not tied to the gaming tribes.
Stafstrom and legislative ally Rep. Ezequiel Santiago have sponsored tandem bills in the two chambers. Both believe new numbers in the legislature since the November election tilt in favor of their bills.
Santiago argues that the state will lose its competitive edge towards neighboring states, and revenue will hemorrhage across the state line if it doesn’t act quickly on its own commercial casino in place. He points to the MGM Springfield that opened in August in Massachusetts and other casinos now operating in New York state.
Ironically, it is generally recognized that MGM has proposed a casino in Bridgeport in part to strike at the Pequot and Mohegan tribes’ efforts to neutralize the MGM Springfield’s impact on their casino numbers. Their arguments are that MGM is sucking money out of Connecticut into Massachusetts. Stafstrom and Santiago are making essentially the same argument but in favor of the MGM Bridgeport proposal.
Santiago points to the New York market a Bridgeport casino could tap. “The market we’re in is so close to Long Island,” Santiago said last week. “We’re a ferry ride away and that market has not been considered.”
He added, “Bridgeport’s location, its access to various transportation modes—I-95, the ferry, the train, the bus terminal—make it an ideal location.”
On February 9 MGM hosted a forum at the Housatonic Community College to promote its vision, to tout the money that could be made and address traffic and safety issues. Bridgeport Mayor Joe Ganim attended and spoke glowingly of the 2,000 jobs the casino could create and the $316 million it would pay the state. Supporters note that this amount is considerably higher than what the tribes currently pay the state. It would make up for losing that revenue if the state breaks the exclusivity agreement with the tribes. Last year the tribes paid the state $263.7 million, and that number has been in decline for about a decade. They would be able to bid for a casino also, Stafstrom and Santiago point out. They just wouldn’t have a lock on winning the bid.
Ganim emphasized the regional appeal of the proposal, calling it “sort of a BridgeHaven approach, “to take advantage of the job opportunities being created in both of Connecticut’s largest cities.” This, of course, makes the MGM proposal attractive to lawmakers that don’t just represent Bridgeport.
Ganim also highlighted that the MGM proposal wouldn’t just be a casino, but an “entertainment complex” that would complement existing projects underway in the city, such as the 5,500 seat Harbor Yard Amphitheater that is being built.
Andrew Doba of MMCT Venture, the joint tribal authority that was formed in 2015 for the tribes to build and run their commercial casino in East Windsor, tried to throw cold water on the idea that the tribes would want to bid on a commercial casino in Bridgeport.
Doba declared, “The tribes have worked with the government of Connecticut for the past 25 years in an arrangement that’s been beneficial to everybody.” He added, “They have no interest in participating in an open bidding process after they’ve generated $80 billion for the state.” He disputes that any commercial casino now operating in the U.S. could make up for what the state would lose if it loses the 25 percent the tribes now pay.
In 2018 the tribes released a report that noted that they would put their payments to the state into escrow while they sue the state. The report stated “Should the state lose that litigation it could result in an up-front permanent loss of more than $1 billion in revenue over a four-year period ($270.7 million times 4) while potential casino sites are identified, bids and proposals are submitted to the state, the state reviews proposals and issues a license and a casino is eventually constructed.”
