Two bills that would authorize a third casino in Connecticut are competing in the legislature. One would allow the MMCT Ventures partnership between the Mohegan and Pequot tribes to build a third, satellite casino their chosen site in East Windsor to siphon off some business from their dreaded competition, the MGM Springfield, expected to open in the fall of 2018. The second would open the competition up to other bidders, including the very MGM that the tribes want to blunt. Only one can pass.
MGM, meanwhile, has been fighting the possibility of a third casino with every fiber of its corporate being, with lobbyists in the legislature, and with an aggressive court challenge that attacks the constitutionality of allowing the tribes to open a third casino without a competitive bidding process.
Attorney General George Jepsen gives their chances of ultimately winning in court more than a cursory glance. Asked to comment by Governor Dannel P. Malloy, Jepsen in an eight-page opinion said MGM might well win, and that the state risks destroying the state tribal gaming compact with the two tribes if it allows a casino off the reservation, even if they are the competition.
MGM’s first challenge, against the law that allowed the tribes to conduct a process to identify a host city, was thrown out of court, but it has appealed to the U.S. Court of Appeals.
Now, an increasingly jumpy legislature has put up competing bills, which each seems to have about the same number of supporters. Currently lawmakers seem very concerned about preserving the existing revenue stream from the Mohegan Sun and Foxwoods.
Tribal leaders met with legislators late last week to ease their fears. The promised to maintain the 25 percent of slot revenue that they pay to the state. Currently that amount is about $200 million annually. And they sweetened the pot by agreeing to pay that same percentage for the third casino and threw 25 percent of table game revenue into the pot as well.
Some legislators were concerned that would not fly with the Interior Department’s Bureau of Indian Affairs, which must approve all tribal-state compacts. Kevin Brown, the chairman of the Mohegan tribe, sought to allay those fears.
“It’s our experience with the Bureau of Indian Affairs that the whole reason that that bureau exists is to oversee the forward movement of Native American tribes across the country and our ability to sustain our economic fortune,” Brown said. “So, it’s slim to none are the chances that they would rule against what we’re trying to do.”
All projections say the MGM Springfield will drain away hundreds of millions of dollars and up to 9,000 jobs, drawing customers mainly from the northern part of the state and, of course, the Bay State.
Complicating things: the tribes’ interests and the state’s interests aren’t the same. The state wants to preserve revenue. The tribes want to preserve their revenue, which is no guarantee.
If the second bill passes, opening competition, MGM would drop its lawsuit. The downside is that the compacts would be broken and the tribes would be able to keep all their revenue, even if it is reduced.
In Bridgeport, the state’s largest city, the second bill is re-firing dreams of a casino that were first sparked in the mid-1990s.
Rep. Chris Rosario, who co-authored the bill, represents the city. “We are here, and all signs point to a better bang for the money if we put it in Bridgeport,” he said last week. Locating a casino in that part of the state would better suit MGM because then it could compete for the license. Its exclusivity agreement with Massachusetts prevents it from trying to build anywhere within 50 miles of Springfield. It argues that the state stands to make more money from such a casino than it will lose from the tribes.
Richard Velky, chief of the Kent-based Schaghticoke Indian Tribe, a tribe not recognized by the federal government, but which has long wanted to operate a casino near Bridgeport, agrees with MGM that a casino in that part of the state would replace the money the state stands to lose. MGM backs the tribe financially.
“A casino in the Bridgeport region would be expected to support 4,000 slot machines and 175 table games, generating roughly $750 million in gross gaming revenue per year — about three times as much annual revenue as the Hartford-area option,” said Velky last week, citing a report his tribe commissioned.
The General Assembly is facing a $1 billion budget deficit this year. Lawmakers are looking at almost any revenue source from road tolls to legalizing and then taxing pot.
The tribes want to build a $300 million satellite casino in East Windsor. State Senate Majority Leader Bob Duff remains one of the tribes’ strongest advocates.
“These are good jobs that people need to keep a roof over their heads,” Duff declared last week. “If any other company had 6,000 direct jobs and 3,000 indirect jobs in peril we would be doing anything we can to help.” Duff opposes Bridgeport for a casino because of congestion in the city.
Some legislators, like Senator Scott Frantz, oppose any casino expansion and has promised to vote against any such bill.
New England War
The conflict between MGM and the Connecticut tribes can be seen as part of a much larger competitive gaming war, with New Hampshire being the most recent entry.
New England consists of six states: Vermont, New Hampshire, Massachusetts, Connecticut, Maine and Rhode Island, with a combined population of 14.7 million. Most of these states have either expanded gaming, or attempted to legalize commercial gaming. Massachusetts, the largest in population, led the movement when it approved an expanded gaming act in 2011 that authorized three casino resorts and one slots parlor.
The first of those, the Plainridge Park casino in Plainville, has been open for nearly two years. The $950 million MGM Springfield will open in the fall of 2018. The $12.4 billion Wynn Boston Harbor will open the following year.
When Springfield obtained its license Connecticut’s tribes began to worry out loud that it would take away a significant portion of their revenues.
Rhode Island is also part of this competition. It has had two casinos, the Twin River in Lincoln and the Newport Grand Casino in Newport. Because of opposition by Newport to adding table games to the Newport’s slots, Twin River convinced the state’s voters to allow it to move its license to Tiverton, whose residents also (narrowly) approved of the move. Since this puts the casino right on the border with Massachusetts, it is a shot across the bow of the Bay State.
Now the New Hampshire Senate has sent a bill to the House that would allow an $80 million and a $40 million casino. Previous efforts have failed in the House.
Maine, which has two casinos, one in Bangor and the other in Oxford, could have a third. The Scott family that promoted the original casino in Bangor in 2003—and then sold the rights to it for $51 million—are back with a proposal for the November ballot that would allow a third casino, this one in York County.
Legislators are not happy about this proposal, especially since it is written in such a way that Shawn Scott is the only person who would qualify to operate the casino. They are also not happy that Bridge Capital, Scott’s company, an LLC based in the Mariana Islands that has been accused of corruption in Laos, among other places. Bridge Capital was also fined $125 million state of Massachusetts last year for not disclosing that it was backing a referendum to build a casino in Revere.
Although his critics have many uncomplimentary things to say about him, this is what Shawn Scott writes about himself on the Bridge Capital website: “He is a visionary who sees value where others do not, and understands how to formulate plans that unlock that value.”
The Maine legislature’s Veterans and Legal Affairs Committee held a hearing on the referendum earlier this month, where lawmakers gave full vent to their questions about Scott and his history. Their hands are tied because other than putting up a competing ballot measure, all they can do is vote to put Scott’s measure before the voters in November.
The members were frustrated because they had no one to quiz other than lobbyist and attorney Dan Riley, who said it was his first day on the job representing Bridge Capital. He did say that he knew that Scott planned to sell the casino if it is approved by the voters.
This prompted Senator Ron Collins to declare “They got the signatures to put it on the ballot and they are going to be spending millions of dollars on advertising, probably six weeks prior to this Election Day in November, to convince people to vote for it. It will be slick advertising just like their whole approach to this was slick,”
Although not usually considered part of “New England,” New York is also a major competitor for the same gaming dollars. Recently three casinos opened in Upstate New York.
Now observers in the gaming industry are increasingly starting to use the word “saturation” when describing this market.
