Third casino plan tripped up by tribe’s lawsuit

In June 2015, Connecticut lawmakers passed legislation opening a door to expanded gaming in the state.

New private-sector data and the company that produced it say that door should be in southwest Connecticut.

Last year”™s legislation permitted an entity owned by the Mashantucket Pequot Tribe and the Mohegan Tribe of Indians of Connecticut ”” operating as a so-called joint tribal entity ”” to solicit proposals from municipalities seeking to host a casino.

However, Richard L. Velky, the chief of the Schaghticoke Tribal Nation, took exception to the legislation citing discrimination and on March 7 sued the state, saying the law violates the state and U.S. constitutions.

“Without any competitive bidding or gaming study, Connecticut shut out the Schaghticoke Tribal Nation and awarded to one pair of Native American tribes the exclusive ability to develop a highly valuable commercial enterprise,” Velky said in a statement.

“The state has a long history of discriminating against the Schaghticoke,” Velky said. “Recently, the state fought our federal recognition ”” one Connecticut member of Congress even submitted legislation to terminate us ”” supposedly because they didn”™t want another casino in Connecticut. Now Connecticut wants to open a new commercial casino, but only if the Schaghticoke Tribal Nation doesn”™t get an opportunity to submit a proposal to operate it.”

The tribe has hired former U.S. Sen. Joseph Lieberman of Connecticut to represent them.

From the beginning, the 2015 proposal has hinged on stemming a potential flow of money from central Connecticut to a new casino in Massachusetts, the $800 million MGM Springfield to open in 2017.

But the legislation also spawned another research effort conducted by gaming giant MGM Resorts International, which commissioned Oxford Economics, a commercially-based forecasting and analytics venture run in conjunction with Oxford University, “to analyze potential economic impacts and highlight key public policy considerations.”

MGM also commissioned Strategic Market Advisors, a New Hampshire-based management consultancy, to provide gaming market revenue estimates.

In a statement, MGM Resorts said, “Indeed, when considered on a net impact basis, and in the context of the existing tribal compacts, the addition of a single casino in north-central Connecticut offers relatively limited fiscal benefits: $16 million of incremental gaming revenue contributions to Connecticut and $17 million of additional state and local taxes.

“Locating a casino in southwest Connecticut would generate far greater economic benefits than locating one in north-central Connecticut because southwest Connecticut offers a much deeper market.

“We estimate the addition of a single casino in southwest Connecticut offers more than two-and-a-half times the net benefits to Connecticut as compared to adding a casino in north-central Connecticut.”

“The bottom line question is where does Connecticut get the best deal?” asked Alan Feldman, MGM executive vice president for global government and industry affairs. “The more comprehensive the study, the clearer the answer becomes. It is not in the Hartford region. Southwest Connecticut offers a market that brings more jobs, more revenue and more opportunity for economic growth. The Oxford Economics study, as a precursor to a full-blown state analysis, precisely lays out the facts.”

The analysis, according to MGM, showed a commercial casino in southwest Connecticut would generate three times the number of jobs and four times the tax receipts. The study predicted an additional $128 million would end up in state tax coffers if the facility is built in southwest Connecticut.

The study itself is a rejoinder to tribe-commissioned studies last year that focused primarily on the impact of a casino in north-central Connecticut and did not consider a sole commercial casino in southwest Connecticut, according to MGM. It was the so-called “limited scope” of the studies prompted MGM to commission its own analysis.

“We have said consistently that there should be an open, competitive, fair and transparent process that allows Connecticut to determine what would be most beneficial if there is to be a commercial casino,” Feldman said.

Senior editor Bob Rozycki contributed to this report.