Connecticut’s two tribal casinos are looking for the legislature to give them the green light to build the state’s first commercial casino off tribal land.
But there are several unanswered questions, legal hurdles, and a newly elected General Assembly that present challenges for MMCT Venture LLC, the joint business venture between the Mohegan Tribal Nation and the Mashantucket Pequot Tribe.
The two tribes said Thursday during a legislative hearing that the new casino won’t impact the Compact, which is the agreement that allows Connecticut to receive 25 percent of the slot revenue from the two tribal casinos in the southeastern part of the state.
An April 2016 letter from the U.S. Bureau of Indian Affairs says giving the tribes exclusivity to build a new casino off tribal land doesn’t violate the compact. However, the BIA warned that the “letter should not be construed as, a preliminary decisions or advisory opinions regarding compacts that are not formally submitted to the Department for review and approval.”
Mohegan Tribal Chairman Kevin Brown said it will seek a formal opinion when the Connecticut General Assembly gives them its full permission to proceed with a third casino.
He said the revenues to the state from that Compact are decreasing because the state did nothing in response to gaming expansion in neighboring states.
Brown said the question still remains — in response to a casino being built in Springfield, Mass. by MGM Resorts International — “Do we want to do nothing as a state?”
Rep. Joe Verrengia, D-West Hartford, said it’s kind of hard to judge what the best deal for taxpayers might be if there’s not a competitive process.
“So I struggle with that,” Verrengia admitted.
However, if the tribes no longer have exclusivity over gaming in Connecticut, then the Compact and the money the state currently receives from that Compact will immediately be put at risk.
Brown said over the past 20 years they’ve provided over $7 billion to the state. That’s more than $250 million a year.
He said that’s the monetary risk lawmakers are taking if they decide to put creation of a third casino out to bid.
He said they also risk losing Connecticut jobs.
A consultant hired by the two tribes concluded that a $300 million casino would generate $300.9 million in gross gaming revenue and create more than 2,000 jobs. The same consultant concluded that Connecticut will lose about 9,300 jobs by 2019, if gambling facilities in New York and Massachusetts cannibalize $703 million in gaming and non-gaming revenues from Connecticut’s two Indian casinos.
But if the Mohegan Tribe was so concerned about Connecticut jobs, then why did they seek to build a casino in Massachusetts?
“When we were competing for the customers in Massachusetts and building a business model for Massachusetts, we were doing it in a way that would preserve our business here,” Brown said. “Why would we go to Massachusetts to build a casino that would cause our casino in Connecticut to fail?”
Uri Clinton, senior vice president and legal counsel for MGM Resorts International, encouraged lawmakers on the Public Safety and Security Committee on Thursday to rethink the exclusivity they’ve given the tribes. He said Connecticut and Georgia are the only two states considering expanding gaming at the moment and competition is fierce.
“These opportunities are very rare and very valuable,” Clinton said.
He said a non-competitive, no-bid contract for the tribes doesn’t allow the state to see what’s actually on the table if the state were to open up the bidding process. Without an open bidding process, Connecticut’s Attorney General George Jepsen has warned lawmakers in 2015 that it could open the state up to litigation.
“We are steadfast to make this happen regardless of litigation,” Felix Rappaport, president and CEO of Foxwoods Resort Casino, said.
Representatives of the tribes were unable to say Thursday whether they would pay Connecticut’s legal bills if it ended up going to court.
The legislation that would codify the tribes exclusivity to open a third casino in Connecticut has yet to be finalized.
But Brown insisted that it has to happen this legislative session, if Connecticut wants to compete.
Clinton warned lawmakers that the BIA letter the tribes are relying upon does not address whether the department would approve the potential compact amendments. He said under the Trump administration the Interior Department may also consider previous decisions made under the Obama administration. There’s also a risk that opening up the compact could lower the 25 percent revenue share the tribes currently have with the state.