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Despite ongoing construction of its $950 million casino resort in Springfield, MA, MGM Resorts remains embroiled in a legal dispute in Connecticut.
The ongoing conflict between tribal casinos in CT and MGM over a planned tribal casino in East Windsor, CT persists. In a recent development, casino employees from CT gathered in Hartford to express their escalating anxiety over potential job cuts. Their growing concern stems from the impending opening of MGM Springfield, which they fear may jeopardize their means of living.
Tribes say 9,000 casino jobs at risk
Donald MacPhee, an employee of the Foxwoods casino owned by the Mashantucket Pequot tribe, expressed his main worry during the Hartford meeting. The gathering also saw the participation of employees from the Mohegan Sun casino, which is owned by the Mohegan tribe. MacPhee shared his concerns with local news station WWLP.
MGM Springfield poses as competition, which is acceptable and not a significant concern. However, in order to reclaim the jobs and revenue for Connecticut, it is crucial to construct the facility in its current location.
MGM is criticizing the East Windsor project, arguing that the state should allow other entities to bid on the new CT casino instead of limiting it to the tribes. In addition, the casino company is taking legal action, claiming that the state lacks the legal authority to exclusively grant the casino project to the tribes.
The Mashantucket and Mohegan partnership (MMCT) argues that approving a third tribal casino in the East Windsor region is the sole solution to preserve approximately 9,300 jobs in Connecticut.
The casino proposal has garnered strong support from the residents of East Windsor. State Sen. Tim Larson also expressed his endorsement of the plan to the Hartford Courant.
In my opinion, this is a significant leap in the right direction. It is crucial for us to preserve employment opportunities within the state of Connecticut. We have successfully achieved this in the defense industry with companies like Pratt & Whitney and Electric Boat. And now, it is essential to extend our efforts to the tourism industry as well.
MGM proposes alternative casino site in Fairfield County
The tribes argue that East Windsor is the most favorable location for a casino, as it would safeguard Connecticut’s gaming industry and yield financial gains. In contrast, MGM holds a divergent perspective, contending that Fairfield County would serve as a superior site for a fresh establishment.
A casino in Fairfield County, situated close to the border of New York state, would undoubtedly face tough competition from the growing number of casinos in upstate NY.
MGM made an offer in March to pay taxes ranging from 30-35 percent on their gaming revenue, in hopes of securing the opportunity to construct a property in Fairfield County. The company believes that by accepting these tax rates, the income generated from a Bridgeport establishment would compensate for any potential losses caused by competition from Springfield.
According to Clyde Barrow, a tribal consultant, a Bridgeport casino would require a staggering $1 billion in annual gaming revenue to recover losses caused by competition. However, Uri Clinton, a vice president at MGM, vehemently opposes this claim.
The tribes themselves have consistently informed their investors that the main concern for their two existing casinos is not Springfield, but rather the potential impact of a commercial casino in southwest Connecticut. This undermines the conclusion of the report.
The most prominent flaw in the Fairfield plan was pointed out by state Senate Majority Leader Bob Duff during a committee hearing held last month.
He explained that there is a fundamental issue with the proposal as Fairfield County is not in favor of having a casino. Moreover, there is an insufficient number of votes to pass any legislation regarding a casino in Fairfield County.
Breaking the CT casino monopoly could cost the state
If the state decides to consider MGM’s Fairfield proposal and allow for bidding, the potential consequences could be highly expensive. This is due to the current agreement in place between the state and the tribes, which grants exclusivity to the casinos. In return for this lack of competition, the tribes contribute 25 percent of their slots revenue to the state.
The potential consequences of breaking the state monopoly on casinos are significant. The tribes could potentially halt their annual payment of $267 million from slots revenue. Although a Fairfield casino might help counter competition from Springfield, it wouldn’t generate sufficient profits to compensate for such a loss. Essentially, the state must weigh the value of opening up casino competition against the potential disruption to its current tribal partnership.
The third casino is becoming a valuable bargaining tool for the tribes, as they recently assured state lawmakers that they will continue making payments if the bill for the East Windsor property is approved. Despite the potential risk to the revenue agreement, the tribes remain steadfast in their commitment to support the state.
“The Day was informed by Mashantucket Chairman Rodney Butler that since the outset, our intention has always been to assist the state that has been our home for countless centuries.”
Although the tribes appear to be open to collaborating with the state, the conflict with MGM appears to be ongoing.
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