Having committed to spending nearly $1 billion on a Springfield casino, MGM Resorts is now aggressively pursuing an all-out campaign led by former US attorney general Eric Holder to crush a rival plan by two Native American tribes to open a casino in nearby Connecticut.
Holder’s Washington-based law firm, one of the largest and most influential in the country, has challenged the constitutionality of the state of Connecticut’s recent granting of an exclusive right to the tribes to open a casino near the Massachusetts border. The MGM suit is demanding that a federal judge declare the move “invalid, null, and void.”
And while its lawyers lead the court battle, MGM has unleashed a phalanx of lobbyists to twist arms and lavish attention on legislators in anticipation of a showdown on the tribal plan in the Connecticut General Assembly early next year.
“It’s a full-court press from MGM” to stop the opening of another casino in Connecticut, said Anthony Ravosa, a former Springfield city councilor and businessman now working with the Mashantucket Pequot and Mohegan tribes to possibly develop a casino in East Hartford. “It’s become almost an obsession with MGM.”
The site of MGM’s planned casino is less than 6 miles
from Connecticut, and its
business plan is premised on about one-third of its customers coming across the border from the heavily-populated — and well-to-do — suburbs of Hartford along Interstate 91.
“If a Connecticut casino gets approved, that dramatically changes the market for MGM,” said Ravosa, who was involved in an unsuccessful bid to develop a casino in Holyoke several years ago. MGM ultimately won that license, which was reserved for Western Massachusetts, by wowing the state Gaming Commission with a plan for an $800 million casino and hotel complex featuring a 25-story tower.
When MGM revealed in September it was scrapping its the tower, some in Springfield began to doubt the company’s commitment, especially as the tribes’ plan for a new casino in Connecticut gained momentum.
Those doubts increased weeks later when MGM filed revised plans showing a roughly 14 percent reduction in the size of the complex.
But MGM’s announcement on Nov. 19 that it now plans to spend $950 million on the Springfield casino, combined with its new and aggressive legal and political forays into Hartford, reinforces the commitment.
MGM has proved its mettle breaking into new markets from Maryland to Macau. But what it faces across the state line in Connecticut is unprecedented: two tribes that already operate successful casinos combining with a state government for the explicit purpose of blunting MGM’s plans.
The state of Connecticut has reaped more than $6.5 billion in casino revenue since the 1990s, when it struck a deal with the Mashantucket Pequot and Mohegan tribes to grant them the exclusive right to operates casinos in the state in exchange for 25 percent of their slot machine revenue.
But as casinos have proliferated in the Northeast, revenue at the tribes’ Foxwoods Resort Casino and Mohegan Sun has slipped badly, leading some Connecticut legislators to call for a defensive strategy in the face of proposed competition from casinos in Massachusetts.
One plan called for adding slot machines at the state’s offtrack-betting facilities in Bridgeport, New Haven, and Windsor Locks. But the tribes threatened to halt their payments of millions in slot revenue if the state ended their exclusive rights to operate casinos.
An expansion of gambling in Connecticut seemed dead at that point. But then a bill was drafted to create a corporation owned and operated by the Mashantucket and Mohegan tribes and exclusively authorized to develop another casino near Massachusetts. In return, the tribes would continue to share slot revenue.
Despite serious misgivings expressed by the Connecticut attorney general, the General Assembly quickly passed the measure and Governor Dannel P. Malloy signed it into law in June.
“All of sudden, up pops this bill,” said Alan Feldman, an MGM executive vice president. “It was astonishing and outrageous that only these tribes would be allowed by the state to operate a new casino.”
Federally recognized tribes have the legal right to operate casinos on reservation land. But rarely, if ever, has a state restricted the field of competitors for a commercial license to an partnership of two tribes. In a recent letter to the Connecticut attorney general, Holder contended that this is a violation of the equal protection guarantee of the US Constitution and a breach of Connecticut’s “bedrock principle” of open competition for state contracts.
East Hartford and three other municipalities last month submitted casino proposals to the Mashantucket and Mohegan tribes — all of them arrayed near Springfield. The tribes say they will make a selection by Dec. 15.
But the bill passed this summer in Connecticut, while authorizing a process for selecting and opening a casino, stops short of authorizing one. That will require another act of the legislature. And MGM is intensely focused on persuading legislators to vote down the measure.
“We’re not going to go peacefully,” MGM president William Hornbuckle told a Bloomberg News reporter in July, referring to the threat of competition in Connecticut.
MGM is relying on Sullivan & LeShane, one of the state’s most prominent lobbying and public relations firms, to get into the trenches and kill the casino bill.
Already, MGM is busy collecting data in telephone calls to residents of East Hartford, according to Richard Kehoe, chairman of the town council and a casino supporter.
Sean P. Murphy can be reached at firstname.lastname@example.org. Follow him on Twitter @spmurphyboston.