MGM Lawsuit Over Connecticut Casino Complicates Online Gaming
Connecticut is proving to be the roller coaster of internet gaming legislation this year. And it all became even more complicated due to a lawsuit filed by MGM Resorts International.
The casino giant filed suit this month against the United States Department of the Interior over its approved changes to compacts between the Connecticut and its two gaming tribes – the Mohegans and Mashantucket Pequots.
Connecticut Governor Ned Lamont anticipated some form of litigation from MGM, which is why he didn’t support this year’s two different gambling expansion proposals. But even though lawmakers never passed those bills, as Lamont failed to support them, MGM pushed ahead to settle the matter in the US District Court instead of through the state.
Now, the roller coaster that was online gambling is now off the tracks.
The lawsuit filed today by MGM represents a strategic shift away from blocking an East Windsor casino to barring Connecticut's federal recognized tribes any ANY off-reservation gambling in Connecticut. https://t.co/Kfbl4xD5f4
— Mark Pazniokas (@CTMirrorPaz) August 7, 2019
Bills and Bills and More Bills
There was some hope for legalized and regulated online poker and casino games in Connecticut at the beginning of 2018 when lawmakers discussed the option as an addition to a sports betting bill. There were also public hearings early in the year at which the Mashantucket Pequots and Mohegans expressed support for online gaming.
But when the 2018 legislative session ended on May 9, there was no bill.
The start of 2019, however, brought a bill. A group of bipartisan lawmakers proposed a bill to legalize online poker, keno, casino games, and sports betting.
There were hearings and many closed-door sessions regarding the topic, and Governor Lamont tried to bridge gaps between supporters and the opposition. But despite Lamont’s initial optimism, he ultimately determined that there were too many differences to make it happen in that particular legislative session.
State Senator Catherine Olson wouldn’t take no for an answer. She and some fellow legislators put forth yet another bill, this one including online lottery games with poker, casino games, and sports betting. It sat as a working draft in July and into August, but the hope for a special session was a part of the efforts.
A part of that new bill, however, featured the final legislative approval for the Mashantucket Pequots and Mohegans to begin construction on their East Windsor casino project.
MGM Concerns Lurked
Despite the strong efforts of Olson and other lawmakers, the support of both gambling tribes in Connecticut, and the reports that bolstered the revenue promises of the new games, Lamont remained concerned and, thus, pessimistic.
Why so negative?
Lamont’s Communication Director, Max Reiss, said the major concern was that any gambling issue must address the concerns of MGM Resorts. Specifically, MGM had long been upset about new casino in East Windsor that was awarded to the tribes. Lamont feared litigation from MGM if the issue was not sorted out prior to putting the new bill up for a vote.
Years of Casino Chaos
Let’s go back to 2017. The topic was a new casino to be built in East Windsor. Lawmakers had worked with the Mashantucket Pequots and Mohegans for years to amend their state gaming compacts so the two tribes would co-own and co-operate the casino.
The casino in East Windsor was going to be located across the border from a new MGM Grand casino project in Massachusetts. That project was MGM Springfield, which opened in the summer of 2018.
MGM Springfield fell short of its revenue projections in its first year in operation. Its president says loyalty to Connecticut’s two venerable tribal casinos is partly to blame. https://t.co/8cKlYvSekP
— Hartford Courant (@hartfordcourant) August 19, 2019
That takes us back to years prior, when MGM first received its license to build in Springfield, Massachusetts. Connecticut followed that move by authorizing the competing casino in East Windsor. MGM didn’t approve of the move and sued the tribes, saying they conspired to keep MGM from building a casino in Connecticut, which MGM claims was its original plan but chose Massachusetts as a second option. Connecticut denied that claim.
Fast-forward back to 2017, when the Connecticut tribes submitted their new compact to the US Department of the Interior (DOI) for its Bureau of Indian Affairs to approve. The Trump Administration had put Ryan Zinke in charge of the DOI, but Zinke had met with MGM lobbyists and subsequently refused to respond to the compact request from the Mohegans and Mashantucket Pequots.
That was one of numerous accusations of unethical and criminal conduct against Zinke in the months that followed. Connecticut lawmakers asked the US Office of the Inspector General to formally investigate the matter involving its tribes, and several members of Congress from Connecticut pushed that request in early 2018. That investigation did begin in April 2018.
The Inspector General referred the matter to the US Department of Justice. And by the end of 2018, Zinke faced several federal probes. President Donald Trump tweeted that Zinke would be leaving his post before 2019, and Zinke then submitted his resignation while still denying all allegations.
Since Zinke’s departure, the DOI and its Bureau of Indian Affairs did approve the Connecticut compact amendments with its tribes.
The Interior Department has dropped its opposition to a new tribal casino in Connecticut. Former Secretary Ryan Zinke’s attempt to block the casino after MGM lobbying led to an ethics investigation that got referred to DOJ.https://t.co/GD5kmdoD6d
— Citizens for Ethics (@CREWcrew) March 22, 2019
Latest Lawsuit, Courtesy of MGM
During the first week of August 2019, MGM Resorts filed a federal lawsuit over the East Windsor casino project. MGM went directly to the US District Court in the Washington D.C. and accused the DOI of erroneously approving the tribes’ new casino.
MGM claimed that the DOI was only authorized to approve compact changes related to casinos on tribal land or on special “land-in-trust” locations via the 1988 Indian Gaming Regulatory Act (IGRA). MGM says the East Windsor casino does not meet those conditions and was specifically chosen to be built just 13 miles from MGM Springfield. And the new gaming compact authorizing the casino, therefore, gave the tribal venture a “statewide, perpetual competitive advantage” over MGM.
The lawsuit also claims that the potential authorization of sports betting, online poker, and other forms of internet gaming to be operated by the tribes in Connecticut is contrary to IGRA. MGM wants to stop all attempts at online gaming before they begin.
MGM has filed a lawsuit challenging the federal approval of a deal that would allow Connecticut's two Indian tribes to open a third casino in the state. https://t.co/AVazt1HHcq
— WTNH News 8 (@WTNH) August 7, 2019
Lamont’s fears proved correct, and he was not afraid to say so in a written statement provided to the media. “As I have consistently said, our state needs to reach a global resolution that will mitigate years of litigation and that will position the state to capitalize on a comprehensive gaming platform,” it read. “Our administration remains committed to these goals and looks forward to working towards a solution that moves the state forward.”
The two Connecticut tribes, working collectively as MMCT, had a different take. Spokesman Andrew Doba said, “MGM pursues litigation because that’s what MGM does. The choice for Connecticut policymakers can’t get any clearer. We can either let a Las Vegas company that generates not one dime of revenue for the state push us around or we can stand strong with the tribes and an industry that’s generated more than $8 billion in tax revenue and currently employs 18,000 people.”
Essentially, the state remains in the quagmire in which it spent most of the year. The tribes an many lawmakers want to proceed with the gambling expansion bill and move forward with the East Windsor casino project, while Governor Lamont remains resistant in light of the new lawsuit and the potential for more.
With Lamont’s opposition to legislation firmly in place, online poker and gaming, along with sports betting and online lottery games, are likely to fall victim to the stalemate yet again.