House narrowly approves study that could roil CT casino landscape

The House narrowly approved a bill Friday that would authorize a study of siting a new casino in Connecticut.

The bill, which passed 77-73 after four hours of debate that stretched over two days, now heads to the Senate, where it is expected to encounter strong opposition.

The measure fractured the House along geographic rather than political lines as lawmakers from the Bridgeport and New Haven areas generally backed the measure. Legislators from other regions largely opposed it, led by the delegation from southeastern Connecticut — where two tribal-run casinos currently have a monopoly on casino gaming in the state.

Although the bill only would authorize two state agencies to study options for a new casino, critics said they feared it could prompt the Mashantucket Pequot and Mohegan tribes to sue to break a revenue-sharing agreement they have with the state.

And even if it didn’t result in a court battle, opponents said, it would amount to an insult to two of Connecticut’s major business partners.

“This bill could change the state of Connecticut,” said Rep. Kevin Skulczyck, R-Griswold, “and I think we’re doing it in a way that jeopardizes a longstanding relationship.”

The Foxwoods Resort Casino and Mohegan Sun “have done more for Connecticut than any other business,” he added. “They put us on the map.”

Connecticut expects to receive $274 million from the casinos this fiscal year through a 25-year-old agreement between the state and the tribes. Under that deal, the tribes share 25 percent of video slot receipts in exchange for the exclusive right to operate casino gambling in Connecticut.

And while Attorney General George Jepsen has issued an opinion stating the study bill would not violate the compact, Rep. Christine Conley, D-Groton, said there is no guarantee the tribes won’t go to court to break the agreement.

“We don’t know what the judge would say,” Conley said. “In my mind, that’s a gamble I don’t think Connecticut should do right now, because we don’t have an extra $270 million to gamble with.”

“The casino hasn’t been built,” Rep. Juan Candelaria, D-New Haven, responded, adding the measure only directs state agencies to invite potential developers to submit proposals. “There’s nothing to break.”

Candelaria also noted, “There is no language in this bill that would preclude the tribes from” submitting a proposal for a new casino.

Debate over the study bill actually began late Thursday night, but was suspended after 60 minutes because of the late hour. It resumed shortly before 3 p.m. Friday, wrapping just before 6 p.m.

“This bill does not in any way authorize the construction of a casino,” Rep. Steven Stafstrom, D-Bridgeport, said. “This merely allows for a full, frank and honest discussion by this General Assembly moving forward.”

“We have a lot of members … that really appreciate the free market and want to see what is out there and what Connecticut could get,” added Rep. J.P. Sredzinski, R-Monroe.

The tribes secured state approval last year to open a satellite casino in East Windsor to help them compete against a new MGM Resorts International casino, set to open in late August or September. That approval was contingent on federal approval of changes the tribes sought to the compacts governing gaming between the state and the tribes.

Federal officials still have not ruled on that application. But 13 legislators, mostly from southeastern Connecticut, wrote a letter Wednesday to the General Assembly saying the casino study bill “is meant to derail the East Windsor project.”

But lawmakers from Bridgeport, the state’s largest city — and one of its poorest — have said their community has been decimated by the steady erosion of Connecticut’s social services safety net in recent years.

And with municipal aid reduced this fiscal year, and MGM expressing an interest in developing a casino in Bridgeport, lawmakers from that region said a study makes sense.

Legislators from many segments of Connecticut have questioned in recent years whether the agreement with the tribes is competitive in relation to revenue-sharing deals between casinos and other states.

The study measure rejected Friday would have required any developer submitting a proposal to build in several components that would have been beneficial to Connecticut, including:

• A minimum $500 million investment in a gaming facility that would employ at least 2,000 people.
• A revenue-sharing program that would send 25 percent of all gross gaming and wagering activities to the state.
• A $50 million licensing fee and a $5 million proposal application fee payable to the state.
• And a minimum $8 million annual payment form the casino to its host community.

But opponents of the bill countered that the tribal casinos mean not only millions of dollars for the state’s coffers, but also thousands of jobs for Connecticut residents.

“I have thousands in my districts that rely on these good-paying jobs to continue to protect their families,” said Rep. Kathleen McCarty, R-Waterford.

The tribes “have developed a business model that has served us well,” said Rep. Kevin Ryan, D-Montville.

Battle moves to the Senate

MGM Senior Vice President and legal counsel Uri Clinton said immediately after the House vote that he went to meet with Sen. Edwin Gomes, D-Bridgeport, to help build support in the Senate.

“We’re excited about the next step,” Clinton said, adding that legislators are realizing the potential of a new casino in the Bridgeport area, with the potential to tap one of the largest metropolitan centers in the world.

“We’re continuing to tell the story about the New York market,” Clinton said. “I think people get it wrong. It’s not about replacing revenue from two large (tribal) casinos, it’s about getting access to the largest market — domestic market — for gaming.”

The bill has strong opposition in the Senate, including Sprague Democrat Cathy Osten, who asserts Connecticut should maintain its strong relationship with the tribes and who has vowed to filibuster the measure into defeat if necessary.

Clinton said that while he respects Osten, “there are passionate supporters for this opportunity.”

He added that, “We’re not pretending that the road doesn’t require real work, but we’re seeing time and time again that logic is winning out.”

Bridgeport Mayor Joe Ganim quickly issued a statement after the vote praising the city’s delegation. “I am extremely proud of the determination, courage and leadership of the Bridgeport legislative delegation, who together with their partners from New Haven and the entire region stood up for substantial growth in jobs and revenue for all of Connecticut,” he said. “This vote sends a strong signal to the business community that we support fair play in the marketplace, we support open competition, and we are open for business.”

The Mashantucket Pequot and Mohegan tribes issued a joint statement late Friday, saying the fiscal impact of the casinos — including the various income, sales and other tax revenues they generate — goes well beyond the video slot receipts.

“Let’s be clear, the only thing this bill accomplishes is to place in jeopardy nearly $1.4 billion is state tax revenue, $328 million of which is slated to go directly to cities and towns,” spokesman Andrew Doba said. “Any legislator who votes for this bill is going to have to head back to their community and explain why they voted to place millions in funding in jeopardy, funding that helps with providing services and keeping taxes down. Those are tough questions to answer any year, but particularly in an election year.”