CTNJ file photo
Attorney General George Jepsen (CTNJ file photo)

Attorney General George Jepsen met with legislative leaders Wednesday to outline his legal concerns over allowing the state’s two federally recognized tribes open up a casino outside their reservations.

In the letter, which was distributed Wednesday during a meeting with all six legislative leaders, Jepsen explained that the legislation may violate the revenue agreements the state currently has with the tribes, and it may serve as a trigger to increase the number of tribes to succeed at asserting the right to casino gambling.

“Both of these issues pose significant uncertainties and potentially serious ramifications for the existing gaming relationships between the State and the Tribes,” Jepsen wrote.

The legislation, which will be debated by the Planning and Development Committee on Monday, allows the Mohegan Tribe and the Mashantucket Pequot Tribal Nation to jointly open up to three new gambling facilities. The immediate goal of the legislation is to slow the number of gamblers who may head north to the new MGM casino in Springfield.

In his letter, Jepsen said he offered the information to lawmakers to help them identify the “legal uncertainties” related to the legislation and the tribes’ memorandum of understanding with the state.

“We’re going to examine the letter and take it into consideration as the bill moves through the process,” Adam Joseph, a spokesman for the Senate Democratic caucus, said Thursday.

It’s unclear how much of what Jepsen’s letter describes as legal hurdles has already been considered by lawmakers and officials from the two tribes, who have been talking for more than a month about the legislation.

Jepsen warned in his letter that the state’s 25 percent share of the casinos’ gross slot revenue would “cease if state law permitted any person other than the Tribes to operate such games or other commercial casino games.”

The two federally recognized tribes have exclusive gaming rights in Connecticut as a result of the agreements they signed with the state and the U.S. Secretary of the Interior under the Indian Gaming Regulatory Act. But it’s unclear if they would need to amend those agreements and, if they did, whether it would be approved by the U.S. Secretary of the Interior.

The proposed legislation “could be deemed a change in state law that would terminate the moratorium, affording the Tribes the right to conduct video facsimile games free of the payment requirements under the MOUs. How a court or other competent authority might resolve this legal issue is at best uncertain,” Jepsen wrote.

Another part of the problem highlighted by Jepsen lies in defining the new business entity the two tribes will form in order to operate the casino.

“Such legislation also should make clear that only the Tribes may own an equity interest in whatever business entity is formed to operate casinos,” Jepsen wrote.

There’s also a question about whether a third party could challenge the tribes exclusive rights to gambling off their reservation. A footnote in Jepsen’s letter points out that giving only these two tribes the right to gaming operations off the reservation could be a violation of the Equal Protection Clause. A third party could also say it’s a violation of the Commerce Clause because it seeks to protect in-state economic interests from interstate commerce.

“We are unable to predict with any certainty how a court would resolve such issues,” Jepsen wrote.

All of those issues are part of the conversations lawmakers are having with the head of the two tribes.

“We have been actively engaged for many weeks with the Attorney General and lawyers for legislative leadership, working to identify the best way to protect nearly 10,000 Connecticut jobs and hundreds of millions in tax revenue that will be lost when a new casino opens in Springfield in 2017, while also addressing any legal and technical issues with the state,” Mohegan Chairman Kevin Brown and Mashantucket Pequot Chairman Rodney Butler said in a statement. “We appreciate that the Attorney General has provided possible avenues to mitigate those risks.”

They added: “We look forward to working with the state to address any of the perceived technical legal risks identified, in a way that works for both the state and the Tribes.”

But it won’t be easy, according to Jepsen. “Given the unique nature and history of the state’s gaming relationships with the Tribes there is very little in the way of legal precedent or guidance that allows for a confident analysis of these complex and uncertain legal questions,” Jepsen wrote.