The chairmen of the Mashantucket Pequot and Mohegan tribes have objected to a proposed casino expansion bill that would allow non-tribal developers to submit proposals for new casinos. In a letter, released Monday, the tribal leaders warn that if passed, the new legislation would breach their exclusivity agreements with the state and would ultimately put the current revenue sharing deal at risk.
Under the terms of the tribal compacts, Connecticut receives 25 per cent of the slot machine revenues generated by the two casinos of the state’s federally recognized tribes, the Mashantucket Pequot and Mohegan. In return, the tribes have a monopoly over operating video slots and casino games. However, this exclusivity would be breached if the State Legislature approves the proposal for casino expansion, known as House Bill 5305 (HB5305), tribal leaders have warned.
In a letter to Gov. Dannel P. Malloy, Rodney Butler of the Mashantuckets and Kevin Brown of the Mohegans express their concerns in relation to HB3505, saying it violates their agreement with the state. According to the new legislation, tribal or non-tribal casino operators would be allowed to submit proposals for a casino somewhere in the state, not only on reserve land. The bill outlines the so-called request for proposals process, which would open the industry for commercial gambling venues to be developed across Connecticut and would breach the exclusive rights of the tribes, Mashantucket Pequot and Mohegan chairmen explain.
Should this happen, tribes would no longer be under the obligation to share with the state 25 percent of the slot machine revenue generated by their casinos. These are the Foxwoods Resort Casino operated by the Mashantucket Pequot Tribal Nation on their Mashantucket Pequot Indian Reservation and the Mohegan Sun, which is owned by the Mohegan Tribal Gaming Authority. According to official data, the two tribes paid the state almost $271 million as per the revenue sharing agreement for the last fiscal year.
Why Is Connecticut Considering Casino Expansion?
Last year, lawmakers passed a bill that allowed the Mashantuckets and the Mohegans to jointly develop a commercial casino in East Windsor. This move was essential for the state and the two tribes as its purpose was to reduce the expected competition by the upcoming integrated casino resort MGM Springfield, currently under construction in Massachusetts. The $950 million resort, expected to open in September 2018, is just minutes away from the state border with Connecticut and 26 miles from the state capital Hardford.
Connecticut’s two federally recognized tribes have, meanwhile, commisioned a study revealing that due to the competition from MGM Springfield, their existing casinos will lose customers. The tribes fear that this will result in huge loss of revenue and ultimately, the closing of their tribal casinos. However, with the third casino in East Windsor, they hope the MGM Resorts International property will not have this devastating impact on their facilities. Although it is still awaiting federal approval, the joint project is already seeing some development as the tribes recently demolished the Showcase Cinemas building on Route 5 in East Windsor. This is the planned location for their commercial casino property.
The project, however, has been strongly opposed by MGM, which made its own proposal for the third casino in Connecticut. The Las Vegas giant announced plans for entering the market in Connecticut with a $675-million casino resort in Bridgeport. The company is fiercely lobbying for a casino expansion legislature, saying that the state should provide a fair bidding process and not discriminate against commercial casino developers in favour of tribal operators.
The State of Connecticut is now struggling to find a solution while MGM is gaining a stronger influence within the legislature and the local communities, which see its project as a fresh source of jobs, revenue and economic development. The tribes, on the other hand, are warning that they may be forced to stop their payments to the state if lawmakers approve the casino expansion bill.
