New casinos hopeless without negotiated deal

Over the last few weeks, we’ve seen a storm of activity by both sides in the Great Casino Debate. To a casual observer, it might look like real progress for MGM in Bridgeport and MMCT, the joint venture of Connecticut’s two tribes, in East Windsor.

We’ve seen demolition of the movie theater in East Windsor, outreach into the Bridgeport schools by MGM and powerful forces lining up on both sides of a bill in the Legislature that would have scrapped the East Windsor plan in favor of an open-bidding process — a game MGM thinks it can win in Bridgeport.

We even saw the bill clear the General Assembly’s public safety committee late Friday in a 22-3 vote after a cliffhanger compromise leaving the East Windsor approval intact.

Don’t be fooled. This is a stalemate. The two organizations appear to have the ability to stop each other. The only way either casino will open, at least anytime soon, is through a negotiated deal.

Without more dealmaking, we’re not likely to see

the open-bidding bill reach Gov. Dannel P. Malloy.

Sen. Tim Larson, D-East Hartford, the public safety committee co-chairman, voted for it Friday even though he doesn’t like the idea of a Bridgeport casino — and he said he’d probably vote for it in the Senate. But the other senator powerfully in the tribes’ camp, Sen. Cathy Osten, D-Sprague, said no, it needs more work.

As for the MMCT plan in East Windsor, without some kind of deal, it will remain tied up in court until long after Connecticut has highway tolls.

What would a deal look like? It could mean one casino opens, the other doesn’t, and the winner pays the loser a whole lot of money. It could mean a smaller casino than the $675 million, 7,000job version MGM envisions,

although it makes sense to build a casino the market will support, not bigger or smaller.

Or it could mean both get built with the grudging blessing of the other, and the money they pay to the state is adjusted to meet a negotiated agreement.

For example, MMCT — the Mohegan and Mashantucket Pequot tribal nations — could pay less than the current 25 percent of slot machine revenues to the state. Half might make sense, 12.5 percent. They’d get that break because they would give up their exclusive right to operate in Connecticut in exchange.

MGM would open in Bridgeport, paying the full 25 percent plus more for table games, because that’s the only way they’d win a license. It’s possible another company or another city would emerge from an open bid process, but that’s unlikely.

MGM Bridgeport remains the best thought-out plan on the best piece of property in the place where investment is most needed for a city that’s as close to 100 percent behind it as we will ever see. And for people who say MGM Resorts International is just bluffing with Bridgeport as a way to stop East Windsor, look at the fact that the company has nine casino hotels in Las Vegas.

Both sides hate the idea of a compromise to assure both casinos open. MGM, which is opening a $960 million complex in Springfield, Mass., this fall, wants no casino of any size along Interstate 91, where Connecticut customers could stop before they cross the state line.

And the tribes, with the Foxwoods Resort and Mohegan Sun casinos, want no casino of any size between their locations in New London County and New York, where gamblers load nightly

into cars, buses and vans to head their way. With full gaming in Massachusetts and Rhode Island coming soon, that’s their lifeline.

MGM, with help from allies in the federal government, can tie up the East Windsor plan in court for what looks like five or six years, more or less, and financing and construction would take years after that. As long as those cases are up in the air, it’s hard to imagine MMCT — not the strongest financial organization to begin with — lining up $300 million to build East Windsor.

The two tribal chairmen, Rodney Butler of the Mashantucket Pequots and Kevin Brown of the Mohegan tribe, say East Windsor will open — open — in 24 months, with the current lawsuit over federal approval for the change in the state compact resolving in a matter of weeks.

Even if that were to happen,

MGM would refile its federal lawsuit claiming the state award of a license to MMCT was unconstitutional.

Give them credit for confidence, but I’ll have what they’re having if they actually believe that timeline.

As for MGM, as of Thursday, anti-gambling Sen. Marilyn Moore, D-Bridgeport, changed her position from a no to a yes. But the MGM open-bidding process faces a tough vote, as the tribes will claim, rightly, that it would destroy jobs at Foxwoods and Mohegan Sun and break a compact that has yielded the state $7 billion over more than 25 years.

Money matters, as always. Here’s the short version: After MGM Springfield opens, the tribes will pay the state about $200 million a year, down from a high of $420 million in 2007. That number could fall further as New York adds more slot machines at Empire in Yonkers and elsewhere.

MGM says the state would be better off letting the compact fade and taking revenues from its private casino along with sports wagers, mobile gaming and fantasy league games. All of that is probably coming anyway, and the public safety committee on Friday advanced a bill to study the whole picture.

The better alternative is to negotiate so that everyone pays and no one sues.

There is no scenario for a win-win compromise. The question is whether a losesome-lose-some deal between MGM and MMCT is best for the state of Connecticut — a place where pure, private investments in recent years in the $675 million range can be counted without the help of a single finger on a single hand.