MGM Resorts International Raises Criticism on Connecticut

In Connecticut, MGM Resorts International’s long-running efforts to stop the passage of a proposed law that would allow the state to open third tribe casinos took another turn yesterday after company representatives delivered a warning written by Kenneth Salazar, former United States Secretary of the Interior.

Also a former Democratic United States Senator and Colorado Attorney General, Salazar oversaw the Bureau Of Indian Affairs for five years under President Barack Obama and now works for the law firm WilmerHale, which has offices around the world including in Washington, DC.

Two pages of warning submitted to Brian Durand, Connecticut governor’s chief of staff Dannel Malloy, and general counsel Karen Buffkin by Uri Clinton, Senior Vice-President for Las Vegas-based MGM Resorts International, and lobbyists Paul Nunez and Jane Murphy express Salazar’s legal opinion that is passed -The proposed legislation will jeopardize the current eastern state revenue-sharing agreement with the Mohegan Tribal Gaming Authority and Mashantucket Pequot Tribal Nation.

MMCT Venture, which is a joint venture of the Mohegan Tribal Gaming Authority and Mashantucket Pequot Tribal Nation, is requesting permission to build a third Connecticut casino in the city of East Windsor but the proposed location is only about 13 miles from Massachusetts’ MGM Springfield development, which is expected to open in the year 2019 is complete with a 125,000 square foot casino offering up to 3,000 slots and 75 gaming tables. MGM Resorts International has lobbied against the proposed Hartford County venue due to the fact that it would have been granted a license in the absence of a competitive bidding process open to other operators.

MGM Resorts International has long expressed an interest in establishing a gambling venture in south-western Connecticut and argues that the state should allow other companies to compete for a third license.

For their part, the Mohegan Tribal Gaming Authority operates the giant Mohegan Sun casino in south-eastern Connecticut while the Mashantucket Pequot Tribal Nation is in charge of the nearby Foxwoods Resort Casino and both have previously stated that their planned Hartford County venture will serve as a measure of defense against competitive threats that incurred by the arrival of the $ 950 million MGM Springfield.

“First they paid former Holder Attorney General Eric [and] then they paid former [United States] Senator Joseph Lieberman [and] now they pay former Secretary Of The Interior,” read a statement from MMCT Venture spokesman Andrew Doba. “What does it add up to? That MGM [Resorts International] is willing to pay anyone and everyone to stop our project from moving forward because they know our proposal will keep jobs and income in Connecticut. “

As part of a deal struck with former Connecticut Governor Lowell Weicker more than 20 years ago, the Mohegan Tribal Gaming Authority and the Mashantucket Pequot Tribal Nation were given the exclusive right to operate slots in the state in exchange for handing over 25% of the machines’ annual gross revenue to the state. . This amount reached as high as $ 430 million in 2007 but fell to $ 262 million last year and Salazar’s legal opinion states that this arrangement will be threatened should the tribe open their East Windsor casino.

“I believe there is a huge risk that the tribes’ proposed amendments will not receive the necessary approvals in terms of Connecticut’s right to a 25% revenue stream likely to end,” reads Salazar’s letter.

Salazar further explained that any revision of the current revenue sharing between the state and the tribes may moreover not be approved by the Bureau Of Indian Affairs due to the length of time the original agreement has been in place and the rate of foreclosure.

“In my opinion, there is a significant possibility that the review, even if it does not result in an immediate termination of the 25% entitlement income, will lead the department to request a reduction of the 25% royalty provision in the current compact,” read Salazar’s letter. “That’s because the 25% rate is extraordinarily high. In fact, it is higher than the rate at the majority of Indian gaming compacts and the department has repeatedly denied lower rates. “

Concerned about the possibility of just such an outcome, last week saw Malloy send a letter to Connecticut Attorney General George Jepsen asking the state’s most senior lawyers to weigh in on the potential repercussions of a proposed bill.

“We have asked for a formal opinion from the Attorney General Jepsen’s office,” said Kelly Donnelly, a spokesman for Malloy. “One of the specific problems we look for clues to is regarding the risks associated with compact amendments. We look forward to your response to our request. “

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