HARTFORD, CT — A lawyer representing a gaming competitor is warning that a legislative effort is underway to bypass federal approval of the state’s first commercial casino that would be operated in East Windsor by the state’s two tribal nations on non-tribal land.
That effort, he claims in a Sept. 26 letter, could cost the state half a billion dollars.
A spokesman for the two tribes, Foxwoods and Mohegan Sun, quickly termed the claim “false” and a “lie.”
Former Secretary of the U.S. Department of the Interior Ken Salazar, a lawyer who represents MGM Resorts, told Connecticut Attorney George Jepsen in a letter that any legislative attempt to avoid the approval by the Bureau of Indian Affairs would be risky.
“In my view, this approach creates a substantial risk to the hundreds of million of dollars that Connecticut receives annually from the tribes pursuant to their current compact and procedures,” Salazar wrote.
He alleged that state legislative allies of the tribal nations are attempting to insert language in the budget that relieves the tribes of federal Bureau of Indian Affairs approval.
“In particular, the tribes may seek to have Public Act 17-89 and the amendments themselves changed so that state authorization for the casino no longer depends on Interior’s approval of the proposed amendments,” Salazar said.
Salazar states in his letter to Jepsen that $500 million in slot revenue to the state could be in jeopardy. Currently, in exchange for the gaming monopoly, the tribal nations that operate Foxwoods and Mohegan Sun provide the state with 25 percent of the take from the slot machines.
The Office of the Attorney General, too, is concerned about the ramifications of bypassing Department of Interior approval.
“We have consistently warned against proceeding with a jointly owned tribal casino off of tribal land without first having approval from the Department of Interior,” Jaclyn Severance, director of communications for the Office of the Attorney General, said Wednesday.
“We continue to think doing so poses grave potential risks to the state of Connecticut,” Severance added.
But Andrew Doba, spokesperson for MMCT Venture, moved quickly to allay concerns.
“Reports of a ‘fix’ for the East Windsor casino in the budget are completely false,” Doba said. “The fact is that we don’t need one. Federal law makes it clear that if the Department of Interior (DOI) does not reject an application, it is deemed approved.”
Doba added: “DOI did not reject our application.”
He accused MGM of planting the story without evidence.
“They know we don’t need a legislative change, and all the letters in the world from Mr. Salazar don’t change that fact. If they’re willing to lie about something as basic as this, why should anyone take them at their word on anything?” Doba asked.
MGM has proposed a nearly $700 million waterfront facility in Bridgeport that officials assert would generate more revenue to the state than the current gaming compact.
In his letter to Jepsen, Salazar said: “The risk — as you explained to the General Assembly and again to Governor (Dannel) Malloy earlier this year is the while memoranda of understanding between the tribes will annually pay the state 25 percent of Foxwood’s and Mohegan Sun’s slot-machine revenue, that obligation continues only so long as Connecticut authorizes “any other person” to operate a casino in the state.”
His letter continued: “Because ‘any other person’ includes the tribes as well as well as the joint venture they have created to operate the East Windsor casino, Public Act 17-89’s authorization for that casino would, in absence of Interior-approved amendment in the tribes’ compact and procedures, end the tribes’ revenue-sharing obligation.”
Salazar told Jepsen that “promises” by the tribes to continue the revenue sharing agreement would not be enforceable.
“I understand that the robes may seek to move forward with an off-reservation casino in East Windsor notwithstanding the Interior’s decision,” Salazar’s letter said.
“Put simply — and as everyone involved previously recognized — preservation of the revenue-sharing arrangement following authorization of a new-in-state casino requires Interior’s approval of compact amendments,” Salazar letter states. “That fact has not been changed by Interior’s decision not to approve the amendment.”
His letter concluded: “Attempts to circumvent the requirement of federal approval would only endanger Connecticut’s revenue stream.”
The East Windsor casino was expected to head off traffic to the new $950 million, MGM casino under construction in Springfield, Mass. That casino is expected to open in the fall of 2018.
MGM lobbied Connecticut lawmakers to open up the bidding process for a third casino and instead the General Assembly voted in favor of legislation to allow the tribes to build a casino in East Windsor.
But it’s unclear how quickly the tribes will be able to move forward and break ground in East Windsor without a clear direction from the Bureau of Indian Affairs.