HARTFORD, CT —A day after a top lawmaker gave them a 50/50 chance of getting permission to build their first commercial casino off tribal land, the leaders of Connecticut’s two federally recognized tribes visited the capitol Thursday to guarantee the state’s share of slot revenues.
House Speaker Joe Aresimowicz, D-Berlin, gave the proposed East Windsor casino a 50-50 chance again Thursday after the Mohegan and Mashantucket Pequot tribes sent a letter to lawmakers guaranteeing its existing slot revenue arrangement with the state. The guarantee of slot revenue from its existing two casinos on tribal land was helpful, but it didn’t necessarily change the odds.
The legislation giving the two tribes permission to move forward says they won’t go forward if the Bureau of Indian Affairs doesn’t approve an amendment to the revenue sharing agreement to allow for a third casino.
Mohegan Tribal Chairman Kevin Brown put the odds of BIA approval at 99 percent. Mashantucket Pequot Chairman Rodney Butler said that in the history of the BIA, “they never have revoked a compact.”
Brown said if the BIA says they can’t go forward with a third casino, then it’s “a done deal.”
Schaghticoke Tribal Nation Chief Richard Velky, who says his tribe would also like to bid on a new casino, questioned the certainty expressed by the Mohegans and Mashantucket Pequots.
“The state should question how MMCT can ‘guarantee’ revenues that rely on a BIA decision they don’t control and a shrinking market they can’t reverse,” Velky said.
As far as the revenue guarantee is concerned, “I don’t know if that makes it a slam dunk,” Aresimowicz said. “I still think it’s a 50-50 proposition.”
He said it makes them more comfortable as they deliberate the legislation going forward.
“With the development of a third casino operated jointly by Mohegan and Pequot, we are committed to guaranteeing our existing slot revenue arrangement with the State and are proposing compact amendments that will ensure those revenue streams are preserved,” the Mohegan and Mashantucket Pequot Tribes said in a joint letter. “SB 957 does not jeopardize this revenue sharing, because it is expressly conditioned on approval of the Tribes’ proposed compact amendments.”
In a visit to the Capitol press room, Aresimowicz said the letter the tribes sent lawmakers Thursday “allows us to have a discussion in an easier way when we’re not really worried about gambling with folks’ money.”
But it doesn’t resolve all of the issues, including the legal ones pointed out last month by Attorney General George Jepsen.
Aresimowicz had said that Jepsen’s letter makes it “difficult” for lawmakers to move forward.
What’s still not clear is how much the state is willing to spend on a legal defense against questions that it violated the U.S. Constitution’s Commerce Clause by failing to put the rights to build a commercial casino out to bid. At the moment, there’s no clear path around that based on the legislation approved by the Public Safety and Security Committee.
“That’s one of the decisions we really have to weigh out,” Aresimowicz said.
On March 13, Jepsen opined there was a “not insubstantial” risk to giving the two tribes the exclusive right to operate a casino off tribal land.
In the 8-page opinion, Jepsen pointed out that there is an increased likelihood if the state was taken to court, the court would reach the merits of constitutional questions about equal protection and the Commerce Clause.
House Majority Leader Matt Ritter, D-Hartford, said he felt Jepsen’s letter was “stronger” on the slot issue and felt that Connecticut would get federal approval for the waiver to its current revenue agreement with the tribes. However, he said it’s hard to see how the state overcomes the Commerce Clause.
Ritter said Jepsen’s concerns were about “just handing a casino to somebody without a public procurement process. He was pretty strong about that. I don’t know how you overcome that, but they’re working on that.”
MGM Resorts International, which is building a casino in Springfield, Mass., filed a lawsuit against the state two years ago claiming that it was violating the U.S. Constitution by allowing the Mashantucket Pequots and the Mohegan Tribal Nation to form a joint business venture to negotiate the location of a third casino. A federal court judge ruled it was too soon to make the claim because Connecticut had not yet actually granted the tribes exclusivity to build a casino.
MGM has been lobbying lawmakers to open the bidding process and allow it to bid on building a casino in the southwestern portion of the state near the New York border. They said a casino in or around Bridgeport will generate more revenue and economic activity for the state than a casino in East Windsor, which is being built to compete with one MGM is building in Springfield.
MGM’s contract with the city of Springfield prohibits it from opening up a casino within a 50 miles radius of the Springfield casino.
“There’s no news here,” Uri Clinton, senior vice president and legal counsel for MGM Resorts International, said. “What the tribes are saying today is no different than what they’ve been saying for months — to which the Attorney General recently responded by saying that even if they try to amend the compact the Bureau of Indian Affairs could reject their request and nullify the entire compact.”
He said the tribes would also need approval of their bond holders to take on the additional debt.
Brown said he believes they will be able to get over the constitutional hurdle because “there is an absolute public good here the state is taking into account in making this decision.”
He said losing more than 9,000 jobs and any revenue, as a result of gaming losses, is one of the arguments that can be made in favor of allowing the tribes move forward.