Give tribes a third casino or put it out to bid?

In the two years since the Connecticut General Assembly bought itself time on the question of allowing a Mohegan-Mashantucket Pequot tribal partnership to build a third casino, the legal issues and the competition — MGM Springfield, opening next year in Massachusetts — have both been building.

The parties have not been whiling away the time. The tribes have selected a site in East Windsor for their joint venture. MGM is appealing dismissal of its claims of unconstitutionality to the U.S. Court of Appeals, and state Attorney General George Jepsen has given the governor his second legal assessment of the project as planned, factoring in developments since 2015.

Now the camera pans to the legislature, which has more ramifications than ever to weigh. An off-reservation casino in northern Connecticut is seen as the way to staunch the flow of customers out of state. The issue before policymakers is whether the state risks more in legal challenges and delays by authorizing the tribes to run it or by opening up the bidding.

Thus far, the legislature has opted for prudence and for seeking ways to ensure a revenue stream. The Public Safety Committee has sent two bills up for deliberation by the full legislature. One would authorize a joint tribal entity to operate a gaming facility. The other would establish a competitive bidding process that could lead to a third casino, but not necessarily one run by the tribes.

The bills outline two dramatically different futures for tribal gaming. At most, one can pass.

All projections are that starting next year MGM Springfield will take away thousands of Foxwoods’ and Mohegan Sun’s customers, mostly from northern Connecticut and Massachusetts. The state’s interest overlaps that of the tribes because of the potential loss of up to 9,000 jobs and all or part of the current $200 million annual revenue from the reservation casinos’ slot machines.

The bill that would allow the tribal partnership, MMCT, to proceed, in effect recognizes the existing compacts and memoranda of understanding between the state and the tribes as a shared interest. The competitive process bill, on the other hand, seems to say the state consider any third casino it could get in northern Connecticut to offset the loss of jobs and revenue.

Opening the bidding to MGM and others would end the current lawsuit and all the delays it might cause. But the choice of a non-tribal casino developer would mean the end of the exclusivity arrangements with the tribes and thus the annual loss of slot machine revenues that paid for that exclusivity.

Jepsen, while keeping some of his potential court arguments up his sleeve in case they are needed, said in a recent letter to Gov. Malloy that MGM could perhaps repeat its earlier claim with more likelihood of success, if the legislature gives the go-ahead to the tribes. If, however, the bidding process is opened, the Department of the Interior, under a new administration headed by a president who once pursued casino development in eastern Connecticut, could operate differently than in the past, and might involve itself more on behalf of the tribes.

While they weigh a decision that will ultimately carry one set of risks or the other, legislators may also have to decide whether a municipality selected for a casino must ask its residents whether they want one. East Windsor officials say none is needed, but some residents said otherwise at a public hearing in March.

Connecticut, with its existing arrangements for reservation-only casinos, has never had a casino referendum law. Rhode Island holds both state and local referendum votes, and Massachusetts casino proposals have gone to referendum. New York took care of it for the whole state in 2013.

That could be the first step for the legislature as it feels its way to authorizing a tribal casino, an open process or neither one. Require a vote for the citizens of East Windsor or any other town that may someday face a casino decision.

The larger question is going to be a gamble, no matter which way the legislature goes.