Federal Judge Throws Out MGM Lawsuit That Opposed Tribes’ Third Casino Plans
by Steve Majerus-Collins | Jul 1, 2016
CTNEWSJUNKIE FILE PHOTO
Mohegan Tribal Chairman Kevin Brown holds a map of MGM’s market
for its Springfield casino
In a move that may help Connecticut’s two federally recognized Indian tribes build a new casino somewhere between Hartford and the Massachusetts border, a federal district judge dismissed a legal challenge to the proposal brought by MGM Resorts International.
The gambling company, which is constructing a nearly $1 billion casino just across the state border in Springfield, Mass., sought to block the joint plan in Connecticut by charging that the state conspired with the tribes to keep out potential competitors.
U.S. District Judge Alvin W. Thompson ruled that MGM failed to “adequately allege an injury” from a law enacted last year that allows the state’s two Indian tribes to form a special business entity and negotiate casino development with a town.
Thompson said that because any injury to MGM is “purely speculative” the company doesn’t have legal standing to sue, a decision the casino operator is likely to appeal.
Neither the Mohegan Tribe nor the Mashantucket Tribal Nation, who are working together on the joint venture called MMCT Venture LLC, have issued any comment on the ruling. MGM sued Gov. Dannel P. Malloy and other state officials.
The two tribes have operated the Foxwoods and Mohegan Sun casinos in southeastern Connecticut since the 1990s under a deal made with the state.
Officials agreed to let them pursue a joint satellite casino to compete with new ventures in neighboring states, but there is no solid plan yet. Once a site is chosen, the state will have the final word on whether to go along with the proposed location and will establish rules governing the operation.
MGM’s $950 million complex in Springfield, now under construction, is slated to open in late 2018.
Alan Feldman, MGM’s vice president of global government and industry affairs, told lawmakers in March that the new joint venture by the tribes would be “a brand new commercial industry” entirely different from the gaming operations on tribal land governed by federal regulations. He said then that the law enacted by the state that allowed the joint venture surrendered decision-making to the tribes while shutting out competitors.
In his response to the lawsuit, state Attorney General George Jepsen argued that MGM lacked standing to bring the case because it “has not suffered a concrete, particularized and actual or imminent injury” and that any harm it has suffered would not be resolved by a favorable ruling.
In accepting the state’s position, the judge’s 20-page decision shot down MGM’s claim that the exclusive rights granted to the two tribes gave them a competitive advantage.
The state countered MGM’s suit by denying the tribes had an exclusive, no-bid contract. In fact, it said, the law allowing the tribes to partner doesn’t let them “do anything they (or MGM) could not already do” before the statute was ever enacted. Moreover, it said, nothing in the law bars MGM from taking steps to develop its own casino in Connecticut.
Thompson said in his decision that MGM’s argument was flawed because it could, like the tribes, enter into an agreement with a municipality to construct a casino and then seek state approval — the same thing the two Connecticut tribes must do to proceed with a project.
The judge also said nothing in the law puts MGM at a competitive disadvantage since it can pursue a project as easily as the tribes.
MGM is a Nevada-based gaming and entertainment company that brought in more than $9 billion in worldwide revenues in 2015.
Its Springfield project “envisions an exciting and lively residential, retail, dining and entertainment district that preserves much of downtown’s most iconic architecture while initiating a rebirth of the city’s downtown neighborhood,” according to the company’s most recent annual report.
A report commissioned by the tribes found the two casinos in southeastern Connecticut will lose about 9,300 jobs by 2019 if gambling facilities in New York and Massachusetts cannibalize $703 million in gaming and non-gaming revenues. The reports author, Clyde Barrow, estimated that a new Connecticut casino north of Hartford would keep about $253 million of that money in state.
A partnership created by the tribes, MMCT Venture, last year received proposals to put the new casino in East Hartford, Hartford, East Windsor, or Windsor Locks, including land in or near Bradley International Airport. East Windsor is already out of the running.
Ongoing discussions with the Connecticut Airport Authority indicate that Bradley remains a likely spot despite taking one site there out of contention this week.
A spokesman for the MMCT, Andrew Doba, said in a prepared statement that the tribes “are pleased that the CAA wants to continue this critically important conversation by suggesting other locations on their property.”
“Thousands of jobs are on the line, and their willingness to remain a part of the discussion as we determine the optimal site for the third Connecticut casino is a real asset in our selection process. Our intention is to announce a set of finalists as soon as that process is completed,” Doba said.
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