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Uncertainty over just how much demand there is for more casino gambling in the region was cited as a factor in the decision.
Mohegan Sun paid the state's general fund $10 million and Foxwoods paid $8.3 million in January.
MGM Resorts vowed to "pursue all legal options" to gain a place in Connecticut's gaming industry.
The Connecticut casinos do not report their table-games revenue and do not share those earnings with the state.
Last month, Mohegan Sun paid the state $11.4 million and Foxwoods paid $9.5 million.
In its motion, Interior argues that the Indian Gaming Regulatory Act cited by MGM is not relevant to the case because the nations are not looking to build a casino on tribal lands.
The two federally recognized tribes aren't willing to trade their already approved joint venture in East Windsor for the rights to a Bridgeport casino.
But a spokesman for Gov. Ned Lamont said the proposed bill "falls short of what the governor wants for Bridgeport."
The Schaghticokes are making a final attempt at gaining federal recognition, which if granted could ultimately lead to a casino in Fairfield County.
Highway tolls and whether or not to expand state-sanctioned gambling are still unresolved.
The money is meant to help offset the state’s regulatory costs for Tribal Winds Casino, the complex that MMCT Venture plans to build in East Windsor.
The suit alleged that the agency failed to take action on approving the East Windsor facility due to pressure from MGM Resorts and Republican lawmakers in Nevada.
“Today is a great day for the Mashantucket Pequot Tribal Nation and the state of Connecticut, especially given our 400-year history together,” Rodney Butler, chairman of the Mashantucket Pequot Tribal Nation, said.
The tribes operating Mohegan Sun and Foxwoods remain adamant that they will not participate in the proposed open bidding process, and that the cancellation of their compact with the state will cost Connecticut billions of dollars in lost revenue.
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