Malloy signs law letting state tribes build third casino

HARTFORD » Bookended by the two tribal chairmen, Gov. Dannel P. Malloy ceremonially signed legislation that allows the tribes to move forward with plans for an East Windsor casino.

Malloy had actually signed the legislation into law three weeks ago, but he did take a new step on Thursday when he signed documents amending the memorandums of understanding the state has with the two tribes. Those MOU’s detail the revenue sharing agreement between the two governments.

The General Assembly will be expected to sign off on the new MOU’s with the Mashantucket Pequot and Mohegan Tribal Nations. Once the General Assembly signs off on the new agreements, then they will go to the Bureau of Indian Affairs for approval.

Under the legislation, the East Windsor casino would pay a 25 percent tax on its slot machines and a 25 percent tax on its table games to the state. The tribes are also expected to make a $30 million payment to the state for the ability to operate the casino. The payment is to be divided up among Connecticut’s largest cities in order to win their support for the underlying bill.

Asked the earliest the General Assembly could take up the changes to the agreements, Malloy said “the sooner the better.”

Malloy’s office said it has 10 days to get the MOU to the clerk of the House and Senate. The General Assembly technically has until the end of the next regular session to act, but could vote on it in special session by adding to another piece of legislation.

If the General Assembly approves the amendments, then the BIA will then have about 45 days to review the amendments. Once that happens, the two tribes will work with East Windsor officials to get all the necessary permits to start construction.

It’s anticipated that MGM Resorts International will sue Connecticut over its decision to give the tribes exclusivity over gaming outside their two reservations in southeastern Connecticut.

Over the past 20 years, the two tribes have contributed about $7 billion to the state under a revenue sharing agreement. During the legislative debate, MGM spent a lot of money trying to convince lawmakers that the Bureau of Indian Affairs would never agree to change the MOU’s the tribes have with the state.

The tribes have said they would abide by whatever the BIA decides and were already anticipating a legal challenge from MGM.

Mohegan Tribal Chairman Kevin Brown said there’s no doubt that MGM will file a lawsuit. He said they’ve taken steps to plan and build the facility under the “shadow of litigation.”

The casino will be located off I-91 at the old Showcase Cinemas site. The old movie theater will be torn down, according to Brown.

Mashantucket Pequot Tribal Chairman Rodney Butler said Thursday was a recognition of what the two tribes can accomplish for the good of Connecticut. He said there’s been tension and conflict over the years between the two sister nations, but this proposal to protect Connecticut jobs brought them together.

The casino is being built in East Windsor to stop casino traffic from heading further north to MGM’s new casino in Springfield, Mass.

“It’s about protecting Connecticut jobs and competing with Massachusetts,” Brown said.

Malloy said they will save more jobs by building the casino than they would if they didn’t build it.

“You have to admire their guts and their grit,” Malloy said of the investments the two tribes have made at their casinos in southeastern Connecticut. “I think the state should be a partner in protecting those investments.”

In May, Malloy said the letter the tribes received from the Bureau of Indian Affairs made him more comfortable with tribal exclusivity.

James Cason, the acting Deputy Secretary for the Department of the Interior, stressed in a May 12 letter that changes in Washington would not impact the tribe’s revenue sharing agreement with Connecticut.

“In practice, the Department has not disturbed long-standing compacts when reviewing amendments to the underlying agreement,” Cason wrote. “Here, the Tribes and the State have long-relied upon the Compacts that have facilitated a significant source of revenue for the Tribes and the State. The Department does not anticipate disturbing these underlying agreements.”

The tribes share 25 percent of their slot revenue with the state. Currently, it’s about $260 million a year, but has been much higher in the past.

However, there are still constitutional questions that could be the basis for a legal challenge.

On March 13, Attorney General George Jepsen opined there was a “not insubstantial” risk to giving the two tribes the exclusive right to operate a casino off tribal land.

In the 8-page opinion, Jepsen pointed out that there is an increased likelihood if the state was taken to court, the court would reach the merits of constitutional questions about equal protection and the Commerce Clause.

It’s likely MGM would use that as a basis for its promised legal challenge.

Uri Clinton, senior vice president and legal counsel for MGM Resorts International, promised to sue Connecticut after the House passed the legislation in June.

“This is just the first chapter in a very long story,” Clinton said. “MGM and others were refused the opportunity to participate.” He said there are “tons of constitutional grounds to challenge.”

On Thursday, he said they “continue to believe that the process put in place by the Legislature and signed today by the Governor violates both the Connecticut and U.S. Constitutions. As such, we will continue to pursue all legal remedies.”

Malloy said the state would defend its decision.

“We know this is worth fighting for, it’s worth protecting,” Malloy said. “Quite frankly, it’s worth keeping Connecticut dollars being spent in Connecticut as opposed to going up 91 and being spent someplace else.”