The chairmen of Connecticut’s two federally-recognized Indian tribes and dozens of casino workers told the legislature’s Commerce Committee Thursday that they aren’t looking to expand gaming by opening a third casino.
The committee was holding a public hearing Thursday on a bill that asks the state to evaluate the cost and benefits of expanding gaming in Connecticut.
“We’re simply trying to mitigate the loss of Connecticut jobs,” Mohegan Tribal Chairman Kevin Brown told the committee.
He said it’s not an expansion of gaming. It’s mitigating job losses that come from increased competition from the MGM Resorts International casino being built in Springfield, Mass.
“It’s not a never-ending pursuit of expanding gaming in the state of Connecticut,” Brown said.
The tribes are opposed to further study of the issue.
A recent study paid for by MGM says Connecticut would be best served to build a casino in southwestern Connecticut rather than north of Hartford. Fred Carstensen, director of the Connecticut Center for Economic Analysis at the University of Connecticut, said he’s also been contacted by MGM to conduct a study.
Rodney Butler, chairman of the Mashantucket Pequot Tribal Nation, and Brown said they would be happy to reconcile their study, released last April, with the ones paid for by MGM.
Clyde Barrow of Pyramid Associations, who did a study for the tribes, told the committee they determined that north-central Connecticut was the ideal location to recapture revenue from Connecticut residents who may choose to travel to the MGM casino in Springfield.
Barrow told the committee that his market analysis was based on actual players club data provided to him by the two Indian casinos.
“We have real data about where customers come from in Connecticut and how much they spend down to the zip code and town and city level,” Barrow said. “It’s a precise analysis based on the real gaming market.”
Barrow said that’s data to which Oxford Economics, which compiled the report for MGM, doesn’t have access.
Oxford Economics concluded the southwestern part of the state would be a more ideal location for a casino.
However, Barrow said, Oxford assumed the capital investment in the casino would be $1 billion, when the casino being proposed would be built for $300 million.
Carstensen said a new satellite casino in north central Connecticut is an “extremely risky” business proposition for the tribes and may actually fail. He said he thinks Oxford Economics was correct in its criticisms of a third casino.
MGM is supporting further study of a third casino.
Possibly though the bigger hurdle will be in answering the questions raised in two federal lawsuits, one by MGM and one by the Schaghticoke Tribal Nation. The constitutional questions raised in those lawsuits are similar to questions raised last April by Attorney General George Jepsen.
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 the amended agreements 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 in his letter to lawmakers last April.
There’s also a question about whether a third party could challenge the tribes’ exclusive rights to gambling off their reservations. A footnote in Jepsen’s letter points out that giving only these two tribes the right to gaming operations off their reservations 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.
The last two arguments are used by MGM and the Schaghticoke Tribal Nation in their lawsuits against the state. The state asked the court last October to dismiss the MGM lawsuit because Special Act 15-7 doesn’t actually allow the two tribes to open a third casino. The lawsuit filed by the Schaghticokes was filed on Monday.
“What we have all recognized is there is the need to assuage any concerns about the current proposal that’s at play,” Brown said Thursday. “We want to make sure we get that next step right.”
Butler said they anticipate addressing concerns raised by Jepsen this year even though there’s no pending legislation that includes the necessary language.
MGM fears that legislation will be written into a “sham” bill at the last minute and approved by the legislature.
