Merrill: Schaghticoke casino ‘authorization’ was ‘error’

The secretary of the state’s office conceded Wednesday it erred in granting an authorization that flouted state law and allowed the Schaghticoke Tribal Nation to assert Tuesday night it could attempt to develop a casino in Connecticut.

Chief Richard Velky issued a celebratory press release Tuesday night interpreting the tribe’s registration of a limited liability corporation whose stated purpose is to develop a casino as permission “to pursue the development of a commercial casino in Connecticut.”

“We are pleased the State of Connecticut has granted us this authority, and in accordance with Section 1(b) of Special Act No. 15-7 we intend in due course to issue a request for proposals to municipalities regarding the establishment of a possible casino gaming facility in a municipality.  We view this as a significant economic development opportunity,” Velky said.

But the special act passed by the General Assembly in 2015 and cited by Velky only allowed the Mohegans and Mashantucket Pequots, two federally recognized tribes operating casinos in eastern Connecticut, to look for a community willing to host a third casino. The Schaghticokes are not federally recognized and have no right under the federal Indian Gaming Regulatory Act to develop a casino on its tribal lands.

MGM, in fact, was refused permission in July to create a limited liability corporation for the express purpose of pursuing a casino in the state. The secretary of the state’s office cited the special act.

The secretary of the state’s office was surprised when contacted Tuesday night about the tribe’s press release. A spokesman promised a clarification Wednesday morning.

Secretary of the State Denise Merrill said Wednesday the purpose of an LLC generally is irrelevant to her office under the law. MGM had flagged the special nature of its application, while the tribe did not, she said.

“The special act created a unique situation that raised the bar for review. In this case it looks like the application was received in error. In 99.99 percent of the cases, we have to receive and file an LLC application without regard to the stated purpose of the entity,” Merrill said. “Anyone can start a business, and we believe it should be easy to do. It appears in this case that the application meets the standard to create an LLC but not the requirements of the special act. We are looking into what additional action should be taken.”

The special act itself is of limited value as it only allows the Mohegans and Mashantucket Pequots to seek requests for proposals from potential casino hosts, not build anything. Many state legislators remain skeptical of granting permission to build the state’s first casino off tribal lands.

MGM is engaged in a game of cat-and-mouse with the two tribal casinos over market share in an increasingly crowded gambling market in the Northeast.

The tribes are seeking permission to jointly build a casino in the I-91 corridor north of Hartford to intercept gamblers who might be interested in visiting the MGM casino resort under construction over the state line in Springfield.

MGM has sued Connecticut in federal court, saying granting even the limited authority to the tribes to exclusively seek requests for proposals from potential casino host communities violates the equal protection clause of the U.S. Constitution.

MGM’s reasoning is that potential host communities were given a clear message from the General Assembly that the Mohegans and Mashantucket Pequots are the only casino developers who should be taken seriously.

The Schaghticokes are not federally recognized and have no right under the federal Indian Gaming Regulatory Act to develop a casino on its tribal lands. Velky did not respond Wednesday to a request for comment.