Facing competition, MGM takes fight to Congress
Last year, Connecticut lawmakers joined forces with the tribes behind Foxwoods and Mohegan Sun with plans of opening a third Indian-owned casino in the state, a strategic move against the $950 million MGM Resorts casino set to open just over the Massachusetts border in Springfield.
In response, MGM hired former US attorney general Eric Holder and a phalanx of high-priced lobbyists in a bid to block Connecticut’s plans, both in court and at the state Capitol.
This month, the Las Vegas-based casino giant took its fight to a bigger arena — Congress.
A little-noticed amendment filed with a military bill would have blocked tribes that run casinos on tribal reservations from opening commercial casinos in the same state — exactly what the two Connecticut tribes are trying to do to impede MGM’s casino in Springfield.
The amendment, sponsored by two senators in Nevada, MGM’s home state, did not come up for a vote. Nevertheless, the attempt by MGM drew a sharply worded response from a spokesman for the Mashantucket Pequot and Mohegan tribes.
“This is a company willing to spend huge sums of money to get what it wants,” said Andrew Doba, the spokesman for the tribes’ joint enterprise. “Their actions in Connecticut, and now in Washington, make it clear that they are willing to do anything to stop this project. And if they’re successful, there will be more people in Connecticut standing in the unemployment line.”
An MGM spokesman declined to discuss the amendment specifically but said allowing the tribes’ proposal to go forward would set “a dangerous precedent” that runs contrary to federal law.
“MGM believes that the current attempt by two tribes in Connecticut to operate a commercial casino is anti-competitive and unconstitutional,” said Alan Feldman, an MGM executive vice president, pointing to the fact that the state is allowing only the tribes to operate the third casino.
“Moreover, it is based on an unprecedented framework that is not consistent” with laws governing Native American casinos, Feldman added.
The office of Senator Dean Heller, a Republican from Nevada, did not respond to requests for comment. A spokesman for Senator Harry Reid, a Nevada Democrat and Senate minority leader, said the federal Indian Gaming Regulatory Act “was never intended to be used as a mechanism to advance commercial gaming by tribes or any other entity.”
Reid’s office declined to say whether MGM had lobbied for the amendment but added that the senator had long believed gambling “should be fair, transparent, and well-regulated.”
MGM, like other large casino companies, has a constant presence in Washington and may seek the filing of a similar measure.
The Indian Gaming Regulatory Act, passed by Congress in 1988, provides the regulatory framework for federally recognized tribes to open casinos on designated reservation land with or without the approval of state authorities. Of 556 federally recognized tribes, a little less than half run casinos.
It is not clear whether any tribes outside of Connecticut are seeking to simultaneously run on-reservation and commercial casinos in the same state, according to national gambling groups. Some tribes already operate commercial casinos in other states — the Mohegan tribe operates a casino in the Pocono Mountains in Pennsylvania, for instance.
The amendment would not prevent that scenario.
The head of the National Indian Gaming Association, which represents about 125 tribes that operate casinos, said the measure would unfairly limit their opportunities.
“We understand that MGM is arguing that participation by Indian tribes in commercial gaming outside of their reservations somehow conflicts with the goals and purposes of the Indian Gaming Regulatory Act,” said Ernest L. Stevens Jr., head of the association. “There is simply no basis in the law for such a suggestion.”
On-reservation casinos are “one means of economic development to support strong tribal governments and tribal self-sufficiency,” while tribal-operated commercial casinos are another, he said.
There is no policy or legal basis to suggest tribes should be prohibited from entering into any such commercial activities, Stevens said.
He has expressed his concerns to the chairman and vice chairman of the Senate Indian Affairs Committee.
The Seminole tribe of Florida, which runs one of the most successful tribal casinos in Hollywood, Fla., also urged the committee to oppose the measure.
“There is absolutely no reason to single out tribes in this way and prevent us from continuing to engage in economic development both on and off our reservation land,” Jim Shore, the tribe’s lawyer, wrote in a letter to the committee.
In Connecticut, plans for a third casino need final legislative approval, but Foxwoods and Mohegan Sun have already scouted out potential locations, including Hartford, East Hartford, and the small town of Windsor Locks. All are within a 30-minute drive from Springfield and about an hour’s drive west of their existing casinos in eastern Connecticut.
MGM bases its business plan on drawing about one-third of its customers from the dense, wealthy Hartford suburbs along Interstate 91, just 30 miles away.
That would deepen the decline in revenue at Foxwoods and Mohegan Sun, a falloff that has contributed to a state budget crisis. The tribes say they plan to present a detailed plan for a third casino to the state’s General Assembly in January, which would give them enough time to open ahead of MGM in the fall of 2018.