Casino bill a threat to tribes
Some fear state will lose share of Foxwoods and Mohegan slot revenues
Despite the best efforts of the eastern Connecticut delegation, the House of Representatives narrowly approved a bill Friday that calls for the submission of casino proposals, the first step in a two-part process some fear could jeopardize the state’s share of the slot-machine revenues generated by Foxwoods Resort Casino and Mohegan Sun.
The bill, which passed 77-73, was referred to the Senate. Seventy-six votes were needed to move it along.
While it makes no mention of Bridgeport, the measure widely is seen as benefiting MGM Resorts International, the Las Vegas-based gaming operator, which last year announced its interest in developing a Bridgeport casino. The Mashantucket Pequot and Mohegan tribes, owners of the Connecticut casinos, staunchly opposed the measure.
The bill would not authorize the opening of a casino, which would require further legislation during next year’s legislative session.
“As a result of the bi-partisan support of members of Connecticut’s House of Representatives, the state is one step closer to adopting a bestin-class process for possible selection of a commercial casino operator,” Uri Clinton, an MGM senior vice president, said in a statement issued after Friday’s vote. “We look forward to continuing this discussion and supporting the legislation as it continues to move through the legislative process. And
we look forward to the Senate and Governor concurring with the House, so that the competitive process can begin, companies including the Tribes can put forth their proposals, and the state can determine the deal that’s best for Connecticut.”
Clinton said MGM remains committed to a $675 million casino and entertainment facility in Bridgeport and a regional workforce development center in New Haven.
The legislation calls for bidders to agree to invest at least $500 million in a casino that would provide 2,000 jobs and demonstrate an ability to pay a one-time licensing fee of $50 million. Applications would have to be accompanied by a $5 million fee that would be refunded in the case of rejected applications.
Debate on the bill began somewhat unexpectedly late Thursday night and resumed Friday for several hours. Eastern Connecticut lawmakers urged defeat of the bill, saying its passage ultimately — if not immediately — could cause the tribes to stop sharing gaming revenues with the state. In exchange for the exclusive right to operate casinos in Connecticut, the tribes agreed decades ago to turn over 25 percent of their casinos’ slots revenues.
When MGM Resorts won a license to open a Springfield, Mass., resort casino, the tribes sought legislation enabling them to jointly develop a third casino to protect their existing facilities. That resulted in a 2017 law authorizing an East Windsor casino that has yet to materialize. The tribes have agreed to pay the state 25 percent of the third Connecticut casino’s gaming revenues — table games as well as slots.
“We’re basically in a marriage,” Rep. Joe de la Cruz, a Groton Democrat, said of the state’s relationship with the tribes. “In this divorce, we’d lose the kids, the house, the car ... There’s no middle ground.”
While state Attorney General George Jepsen has said passage of the bill would not breach the state’s revenue-sharing agreements with the tribes because it does not authorize another casino, the tribes have suggested they could escrow their payments to the state while the matter is being adjudicated. Those payments totaled more than $270 million in the fiscal year that ended last June.
A portion of the payments is doled out to municipalities via the Mashantucket Pequot and Mohegan Fund.
“I believe the tribal nations could stop paying today,” said Rep. Kevin Skulczyck, a Griswold Republican, putting the state at risk of losing hundreds of millions a year even if it ultimately were to prevail in court.
“I don’t know how we’d make up that deficit,” he said.
Rep. Holly Cheeseman, an East Lyme Republican, said the benefits of another casino are speculative while the revenues and jobs the existing casinos provide are facts. She noted that the tribes’ payments certainly would cease as soon as the state authorized another casino, which then would take several years to build. And, she added, the bill could affect the tribes’ ability to secure favorable financing terms for their East Windsor project, given the potential for more competition on the horizon.
“If we’re not intending to award a (casino) license, why are we doing this?” Cheeseman asked.
Rep. Chris Soto, a New London Democrat, said he agrees that the state needs to map out its gaming future but that the request-for-proposals process is the wrong way to go about it.
Some representatives questioned whether the bill is even necessary and whether the request for proposals would attract much of a response.
“I smell a rat,” said Rep. Doug Dubitsky, a Chaplin Republican.
He said a Bridgeport casino would have to be massive to generate enough gaming tax revenue to offset the state’s loss of revenue from Foxwoods and Mohegan Sun, “two of the biggest casinos in the world.”
“Nobody is planning to build a casino in Bridgeport. Nobody. The numbers simply don’t work,” Dubitsky said. “This bill would simply delay the East Windsor casino and the state will wind up losing millions . ... ”
“(The state and the tribes are) basically in a marriage. In this divorce, we’d lose the kids, the house, the car ... There’s no middle ground.” REP. JOE DE LA CRUZ, D-GROTON