MGM Resorts International is suing Connecticut Gov. Dannel P. Malloy and other state officials in federal court claiming that they approved an unconstitutional law earlier this year.
The law signed June 19 by Malloy allows the state’s two Indian tribes to form a special business entity and negotiate casino development with a town, which would still need legislative approval. The joint venture between the Mohegan Tribe and the Mashantucket Tribal Nation to build a third casino in the state would compete with MGM’s Springfield casino.
“While our company is supportive of tribal gaming as permitted under the Indian Gaming Regulatory Act, the law passed in Connecticut gives two preferred tribes an unfair and unjustified preferential treatment by designating them as the only entities, tribal or commercial, authorized to negotiate with cities and enter development agreements for a new commercial casino on non-reservation land in Connecticut,” Bill Hornbuckle, MGM Resorts International president, said in a statement.
The federal lawsuit says that the new law creates “an exclusive, no-bid process for the Preferred Tribes to present to the Connecticut legislature a proposal for development of an off-reservation commercial casino in Connecticut.”
MGM, according to the complaint, believes the law violates the Equal Protection Clause because “it is a race-based set-aside in favor of the two Preferred Tribes at the expense of all other tribes, races, and entities.” It goes onto say it violates the “dormant Commerce Clause because it discriminates on its face in favor of the two in-state Preferred Tribes at the expense of out-of-state competitors, all of whom are barred from attempting to develop a casino gaming facility in Connecticut.”
MGM attempted to be recognized by the state as a qualified bidder on a third casino, but had its registration rejected before filing the lawsuit Tuesday in U.S. District Court in Hartford.
“MGM is ready, willing, and able to compete for the opportunity to develop a commercial casino gaming facility in Connecticut, but is excluded by the Act from competing for this opportunity,” the complaint states.
Mohegan Tribal Council Chairman Kevin Brown and Mashantucket Pequot Tribal Chairman Rodney Butler said they are not surprised by the lawsuit.
“We are not at all surprised by MGM’s actions today and frankly suspect we will see more tactics just like this in their effort to stop Connecticut’s leaders from protecting Connecticut jobs and revenue,” Brown and Butler, said. “MGM has made clear from the beginning that their entire project is based upon a single foundation: exporting Connecticut’s revenues and jobs to Massachusetts.”
The tribes have commissioned reports, which show the amount of money the state would lose in slot revenue and jobs if there wasn’t a third casino built to stop the flow of traffic across the border to Springfield, Mass.
“I think MGM is realizing we’re serious about our market share,” Rep. Stephen Dargan, D-West Haven, said Tuesday. “I don’t think MGM thought we’d get this far.”
A report commissioned by the tribes found the two casinos in southeastern 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.
Clyde Barrow, the author of that report, estimated that by building a casino north of Hartford, “there’s $253 million from Connecticut residents that can be blocked.”
Hornbuckle said his company deserves a chance to compete in Connecticut, but because of the legislation he’s not being given that chance.
“MGM regularly competes for commercial casino development opportunities and would like to be able to do so in Connecticut,” Hornbuckle said.
A spokeswoman for Attorney General George Jepsen said they are reviewing the complaint and “will respond at the appropriate time in court.”
Devon Puglia, a spokesman for Malloy, who is one of the three named defendants said, “While we will be reviewing the lawsuit, we believe in protecting Connecticut jobs.”