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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.
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.
East Windsor leaders say the town could see approximately $8.5 million per year from property taxes and an agreement made with the tribes if the proposed Tribal Winds casino opens.
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.
"We should not settle for anything short of the best deal possible," said Rep. Christopher Rosario, a co-sponsor of the bill.
The tribes have yet to submit a building permit application to the town of East Windsor.
Two new reports are highlighting the financial and political investments that MGM Resorts International has made to secure a stake in Connecticut’s casino industry.
Still in the running is Windsor Locks; either way, the government must ultimately agree to allowing a third gambling site in the state.