Casino Bills Both Likely To Advance, But Legislature Still Unsure On Direction

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Casino Bills Both Likely To Advance, But Legislature Still Unsure On Direction

Pivotal votes on casino expansion in the state will come Wednesday, but they aren't expected to send any clear message on what direction the legislature should take.

The legislature's public safety and security committee, which oversees gaming, is expected to approve two bills with opposite intentions.

One would allow the Mashantucket Pequots and Mohegans, which operate the Foxwoods and Mohegan Sun respectively, to jointly run the first casino in Connecticut not on a tribal reservation.

The other bill would open up the process to more potential proposals that could be compared with what the tribes are planning for their preferred site in East Windsor.

Rep. Joe Verrengia, D-West Hartford and the committee's chairman, said committee members are divided on the issue and passing both of the bills out of the committee will set the stage for more debate in the full House and Senate.

The House and Senate's approval also is required to expand casino gambling as well as Gov. Dannel P. Malloy's signature.

The partnership of the Mashantucket Pequots and Mohegans — MMCT Venture — and the strategy of a third casino is aimed at mounting a defense to the competitive threat of a $950 million casino and entertainment complex now under construction in Springfield.

A third Connecticut casino would, in theory, keep gaming revenue in Connecticut, benefiting the Mashantucket Pequots and Mohegans. But the idea gained traction with some state legislators as a way to preserve Connecticut jobs that could be lost if the Springfield venue draws away Connecticut customers and stop erosion of slot revenue, which the state gets a portion of every month. This year, state coffers are expected to take in $267 million from the slots.

On Monday, Connecticut Attorney General George Jepsen sent an eight-page legal opinion to Malloy, highlighting risks of the tribes expanding, echoing similar concerns first raised by Jepsen's office in 2015.

Those concerns led to the legislature creating a two-step process for the tribes' expansion: find a location for a third casino and then come back to the legislature for final approval.

Jepsen said the state could face challenges on constitutional grounds if it backed MMCT because other potential operators were excluded. There also could be risks to the decades-old agreements that guarantee the state a share of slot revenue, in exchange for giving the Mashantucket Pequots and Mohegans exclusive right to operate casinos on Connecticut.

The loss of slot revenue coming to state coffers is a sensitive issue given the state's budget woes. Concerns have been raised that even the tribes themselves expanding could threaten the exclusivity agreement.

Jepsen also said there were ways to defend against a court challenge, and amendments proposed by the tribes to the slot revenue-sharing agreement might pass muster with the U.S. Department of Interior.

However, Jepsen could not fully reassure Malloy about what would happen.

Malloy's reaction to the legal opinion Monday was measured, with a spokeswoman only saying it would give the governor issues to consider should the legislature back the tribes' plan.

MGM has emerged as a key player in pushing for an opening process. MGM has argued that the state could benefit more from a casino being established in southwestern Connecticut where it could also draw from New York. MGM has expressed interest in developing such a gambling venue.

If the state allowed another operator in, it would certainly end the tribes' exclusivity agreement with the state, cutting off slot revenue. MGM, however, has said a southwestern Connecticut casino could bring in more revenue.

MGM has already challenged in court the 2015 law that allowed MMCT to search for a location and excluded others. A lower court sided with the state, but the case is now pending an appeal. MGM has said it is all but assured it will file again if MMCT is given the go-ahead to expand in East Windsor.

In hearings before the public safety committee, MMCT has said it would build even if there was another lawsuit.

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