AG says MGM bluffing in the casino border war

A rendering the entrance to MGM Springfield.

MGM

A rendering of the entrance to MGM Springfield.

Connecticut asked a federal judge Wednesday to call what it suggests is a cheeky bluff by MGM Resorts International to protect the casino MGM is developing across the border in Springfield, Mass.

The office of Attorney General George Jepsen filed a motion asking U.S. District Judge Alvin W. Thompson to dismiss the lawsuit MGM filed last month to block owners of the state’s two tribal casinos from trying to jointly develop a third casino near the state border.

Jepsen’s office says MGM has no legal standing to sue, offering a dry legal argument about timing, as well as a juicier suggestion the company fabricated an interest in building its own casino in Connecticut.

MGM officials could not be reached for comment.

According to the motion to dismiss, MGM’s deal in Springfield bars it from pursuing other gambling developments within 50 miles, an exclusion zone that covers north-central Connecticut — the only region under serious consideration for a casino.

“Therefore, MGM is precluded from applying for a license for, managing, operating or having a financial interest in a casino located in most of Connecticut,” the state says in its motion.

The exclusion zone covers all of Hartford, Tolland and Windham counties, large portions of Litchfield, New Haven and Middlesex counties and much of New London county, home to the two tribal casinos, Foxwoods Resorts and Mohegan Sun. 

“Notwithstanding MGM’s inability to develop a casino in most of Connecticut, it claims to have ‘completed a preliminary feasibility study, which analyzes the viability of a potential casino development in Connecticut and reaches the preliminary conclusion that such a development is both feasible and desirable for MGM,’ ” the state says.

The state also says MGM’s lawsuit was premature, since a law passed earlier this year gave Connecticut’s two federally recognized tribes, the Mashantucket Pequots and Mohegans, no legal right to develop anything.

The legislature actually rejected a request by the tribes, which are trying to maintain market share for their casinos in eastern Connecticut, for authorization for a casino in the I-91 corridor north of Hartford to compete with Springfield.

Instead, the legislature passed a consolation prize: a measure creating a formal process by which the tribes could select and negotiate with a community willing to host a casino. Nothing could be built, however,without passage of another law.

Jepsen’s office says MGM is free to essentially mirror what the tribes are doing: Seek a community willing to host a casino, then ask the General Assembly next year to provide the legal authorization for construction.

Of course, the process is greatly complicated by Connecticut’s agreements with the tribes under the federal Indian Gaming Regulatory Act. The state permits slots at the tribal casinos under the terms of a deal that gives the tribes exclusivity in return for a 25 percent share of the gross handle.

Even it the court dismisses the MGM suit, the state still faces legal hurdles if it chooses to authorize a third casino.

Jepsen warned legislators last spring that a law giving the Mashantucket Pequots and Mohegans exclusive rights to a casino could be challenged as discriminatory. And if the legislature authorizes an open competition, it risks negating a slots deal that produces more than $200 million annually for the state.

The motion filed by Jepsen’s office suggest no solutions to those concerns. Instead, it asserts that it is too early to litigate those issues and MGM is not the right plaintiff.

 

 

 

 

Comments

comments