State, tribes considering options in wake of East Windsor decision

October 1, 2018 GMT

Neither the state nor the Mashantucket Pequot and Mohegan tribes had decided Monday whether to appeal a judge’s ruling that dimmed prospects for the tribes’ East Windsor casino project.

Bolstered by the ruling, MGM Resorts International, whose $1 billion Springfield, Mass., casino opened last month, renewed its call for Connecticut lawmakers to approve a competitive bidding process for commercial casinos in the state.

The Massachusetts casino threatens Foxwoods Resort Casino and Mohegan Sun.

“We started this process because thousands of people will lose their jobs and the state will lose millions in revenue if we fail to compete with MGM in Massachusetts,” Andrew Doba, a spokesman for the tribes’ MMCT Venture, said. “We are obviously disappointed with the court’s ruling and are currently reviewing our options.

“We remain committed to both seeing this process through and to the people of Connecticut and our partners in state government,” Doba said.

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The state attorney general’s office announced it was reviewing the ruling as it evaluates “possible next steps.”

In the decision, filed over the weekend in U.S. District Court in Washington, D.C., Judge Rudolph Contreras dismissed the state and the Mashantucket Pequots’ bid to compel the U.S. Department of the Interior to effectively approve an amendment to the Mashantuckets’ gaming agreement with the state.

Such approval is the final obstacle preventing the tribes from moving forward with the East Windsor project. The Mohegans’ amended gaming agreement was effectively approved June 1 when the Interior Department published notice of it in the Federal Register.

Soon after, the Mohegans withdrew from the lawsuit.

Interior had argued that while its regulations require it to act on amendments to tribal-state gaming agreements, it is not required to act on amendments to agreements “prescribed” by the Interior secretary following mediation. The Mohegans’ agreement is considered a tribal-state compact; technically, the Mashantuckets’ is not.

Contreras also granted MGM Resorts’ request to intervene in the case, finding the East Windsor project “would expose MGM to added competition.”

MGM Resorts, the Las Vegas-based casino operator, has long sought to thwart the tribes’ efforts to exclusively pursue casinos on nontribal land in the state. The tribes’ gaming agreements require them to pay the state 25 percent of their existing casinos’ slot-machine revenues in exchange for the exclusive right to operate casinos. The payments have dwindled over time.

MGM Resorts has proposed a Bridgeport casino that would have to be authorized by the state.

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“Connecticut residents are best served by the state spending less time in court and more time on real opportunities to maximize economic development and job creation,” MGM Resorts said in a statement. “That’s why each passing month makes it more obvious that the most productive path forward for Connecticut is to pass legislation calling for competitive bids on any new commercial casino in the state, and to get started on that process.

“That is the best way for the state to stem the ever-decreasing money flowing from tribal casino operations and effectively modernize the state’s outdated gaming policy. MGM stands ready to participate in that process, consistent with the plans for MGM Bridgeport announced more than a year ago.”

State Sen. Cathy Osten, D-Sprague, co-chairman of the legislature’s Appropriations Committee, said she would be willing to draft a bill that would allow the tribes to develop the East Windsor casino without Interior Department approval of their amended gaming agreements. The 2017 law that authorized the East Windsor project required the federal approvals.

“Again I stand with the two gaming institutions that have been partners with the state of Connecticut all along,” Osten said. “They have provided real jobs in Connecticut. What MGM is saying, from my perspective, is not going to provide us with jobs. … They’ve walked away from Bridgeport before, and they’ve walked away from Ledyard before.”

MGM Resorts had a licensing agreement with the Mashantuckets, who named their second casino tower MGM Grand at Foxwoods in 2007. The agreement expired in 2013, and the tower was renamed The Fox Tower.

b.hallenbeck@theday.com