MGM, Tribes Spar In Legislature Over Southwestern Connecticut Casino

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MGM, Tribes Spar In Legislature Over Southwestern Connecticut Casino

The two sides in the casino expansion debate turned up the pressure Monday at a legislative hearing on the third bill this session to deal with whether the state should allow a casino off tribal lands.

A partnership by the tribal operators of Foxwoods and Mohegan Sun, which is seeking to establish a satellite casino in East Windsor, released a consultant's report that poked holes in the viability of a casino in southwestern Connecticut.

MGM Resorts International Inc., a strong proponent of opening up the process to more potential casino operators beyond the Mashantucket Pequots and Mohegans, including MGM, argued that multiple bidders are the only way to ensure the state gets the best deal in an expansion.

And members of the finance, revenue and bonding committee are trying to sort it all out.

"This is a debate about a bird in the hand versus two in the bush," said John W. Fonfara, D-Hartford and co-chairman of the committee. "Much of the testimony so far is about if you've had a bird in the hand and you've had a bird in the hand for many years and benefited from that bird and now we're being dazzled by the potential of something else."

Fonfara added: "That doesn't leave a lot of people comfortable in that we should grab for something shinier and end up with something [worse]."

The plan by the Mashantucket Pequots and Mohegans is aimed at keeping gambling dollars — and Connecticut's share of that revenue — and jobs tied to the gaming industry from flowing to a $950 million casino complex under construction in Springfield. The complex is being developed by MGM.

The finance committee's bill is framed as one that would set up competition. But Fonfara said both options would be examined, focusing on revenue implications for the state.

Clyde Barrow, a consultant to the tribes who has studied the growth of gaming for more than two decades, wrote a report, released Monday, that found that a casino in southwestern Connecticut would not be able to return the level of revenues to the state as now paid by the tribes.

A decades-old agreement between the Mashantucket Pequots and Mohegans gives the state a 25 percent cut of slot revenues each month. The East Windsor casino, if opened, would give the state 25 percent of slot revenue and 25 percent of table games.

Part of the reason a southwestern Connecticut casino wouldn't be able to generate enough revenue is that competition is expected to intensify, Barrow said.

Since the debate over casino expansion in Connecticut began two years ago, three casinos have opened in New York, Springfield is well underway and Rhode Island has approved a casino in Tiverton, near the Massachusetts line, Barrow said.

It would likely take three years to establish a casino in southwestern Connecticut, Barrow said

And in three years, a moratorium on a casino in New York City expires. The prospects, Barrow told legislators, are gloomy since New York is supposed to be key draw for a southwestern Connecticut gambling venue.

"It's going to end up as the Trump Taj Mahal of Connecticut," Barrow said. "It's going to be filing for bankruptcy in 30 days."

Uri Clinton, senior vice president and legal counsel for MGM Resorts, acknowledged that the Northeast gambling market may be reaching its saturation point but that was all the more reason to seek competitive bids.

"But if that's true, I think its incumbent on this body to look for a way to maximize your next — maybe your final — but your next casino," Clinton said.

Clinton said the prospect of competition clearly prompted the partnership of the Mashantucket Pequots and Mohegans — MMCT — to make the offer of a guarantee of slot payments to the state, if they were allowed to expand to East Windsor.

"Now that fact alone tells you in a competitive environment people put their best foot forward, not the foot that saves them the most money or benefits them," Clinton said.

MGM has expressed an interest in southwestern Connecticut to tap into the New York market, where MGM does not have a presence.

Last month, Attorney General George Jepsen warned that giving the tribes the exclusive opportunity to expand could be challenged in court. And the revenue-sharing agreement, known as the compact, could be broken, jeopardizing the tribes' monthly payments to the state — expected to be $267 million this year — even if it was the tribes doing the expanding, Jepsen said.

The finance bill is the third piece of proposed casino expansion legislation to be considered by state lawmakers this year. Two bills — one supporting the tribes' plan for East Windsor and a competing bill that also would open up the process to more potential operators — both passed out of the public safety and security committee last month, neither with a strong mandate.

Monday's hearing took a heated turn when Rep. Christopher Davis, R-Ellington and the finance committee's ranking member, turned some pointed questions at MGM.

Even if the full legislature chose to open up the expansion process, there is no guarantee that MGM would even bid, Davis said.

"I'm just pointing out to the public and to members of this committee that under no circumstances is there a requirement for MGM to actually move forward with any proposal," Davis said. "And, in fact, you guys might be doing this for other alternative motives to slow down the tribes from being able to build their casino rather than [MGM] being able to build another casino in southwestern Connecticut."

In an interview, Clinton denied that MGM's support of open bidding was a stalling tactic.

"It's not true," Clinton said. "There's no delaying tactic. What we are looking for is a meaningful opportunity and we've taken no greater [means] to push the issue than they've taken to oppose it."

In 2015, the legislature voted to allow the Mashantucket Pequots and Mohegans to search for a site in the Hartford area to combat the competitive threat of MGM in Springfield. But the tribes had to come back for final approval to expand off their southeastern Connecticut reservations, a move that sparked the competing bills.

Senate Majority Leader Bob Duff, D-Norwalk and a supporter of MMCT's vision, testified Monday that there is no support among legislators for a casino in Fairfield County.

Duff urged the committee to keep its eye on the ball.

"Connecticut does not have the luxury of time, in fact, the clock is ticking," Duff said. "MGM is building and if we delay this opportunity to preserve these jobs, Springfield will be open, thousands of Connecticut residents will be laid off and the only winner will be MGM and the state of Massachusetts."

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