Connecticut Governor Sides with Tribes in Bid for Third Casino

Posted on: May 23, 2017, 03:33h. 

Last updated on: May 23, 2017, 06:36h.

Casino.org Staff Writer Read More

Expertise: Commercial Gaming.

Issuing his first public comments about a controversial proposed casino site, Connecticut Governor Dannel Malloy said he is prepared to support a plan that allows the state’s two tribal casino operators to jointly run a third.

In an interview with the Connecticut Mirror on Friday, Malloy said the only realistic route casino expansion could take would be the tribal option. But he did express caveats, emphasizing that he would not sign off on any piece of legislation that might jeopardize the revenue-sharing agreement with the state.

“If I can help the legislature focus, it’s do you want to work with the two tribal nations that employ thousands and thousands of people in our state?” he asked. “If that’s what you’re trying to do to help secure those jobs and that base, then there is one road to go down.

He also rejected the idea of opening the bidding up to commercial casinos, aware that such a bid on a license to open a casino in East Windsor would only be a defensive move by MGM, trying to protect the route to their $950 million casino resort in Springfield, Massachusetts, 13 miles up the road along Interstate 91.

Critical Mass

The Mohegan and Mashantucket Pequot tribes want to open a “satellite casino” in the town of East Windsor. They argue that the new venue is necessary to protect Connecticut gaming revenues and Connecticut jobs.

The agreement currently in place, created by the state’s compacts with the Mohegan and Mashantucket Pequot tribes, calls for tribal casinos to share 25 percent of gross slot revenues, and in exchange also requires that the two tribes, as a protected political class, receive preferential consideration in casino endeavors.

“I will not sign a transaction or bill that puts into real danger our existing arrangement with the tribal nations,” Malloy said, “nor would anyone in this building who thought about it. And I’m not sure we’ve had that clear, crisp discussion.”

Since 1993, this arrangement has put more than $7 billion in state coffers. But it presents several legal challenges if they move forward developing a jointly operated satellite casino.

First, the East Windsor site is not located on tribal lands, which means Connecticut will have to amend its constitution to permit the development. Also, any plans would have to ultimately be approved by the US Department of Interior, which oversees the BIA and still could disallow it, as authorizing tribal gaming outside tribal lands might provoke an avalanche of off-reservation casino expansion.

Constitutional Challenges

Federal authorities with the Bureau of Indian Affairs gave a preliminary nod to the new casino last month, despite resistance from Sen. John McCain, a key architect of the Indian Gaming Regulatory Act in 1988.

McCain wrote a letter to BIA earlier this month that supported the interests of MGM Springfield, contending the tribes should not be allowed to build “off the reservation.” He claimed such developments could threaten current tribal gaming compacts.

There is still a question of whether a commercial casino operated by the tribes would be able to survive a legal and constitutional challenge by MGM, intent on protecting its nearby investment.  The casino giant has said it is prepared to argue that, because the process is not open to commercial bidders, it violates equal protection guarantees and the commerce clause, as enshrined by the US Constitution.

“We respectfully disagree with the Governor’s assessment,” MGM Senior Vice President Uri Clinton said in a written statement. “The best deal for Connecticut, in terms of generating tax revenue and creating jobs, is to scrap the current process and put in place a new one that is fair, open, and competitive.”