Mohegans may need Norwich Hospital more than ever
The earth under Connecticut's gambling landscape shifted a lot this week, as a co-chairman of the legislature's Public Safety and Security Committee disclosed the committee soon will consider a bill that would open the door to competition for a new commercial gaming license in the state.
Co-chairman Joe Verrengia of West Hartford, a retired police officer, said a bill opening the doors to competition for a new Connecticut casino, one that would compete with existing reservation casinos in eastern Connecticut, will be revealed this week.
The committee also will consider a separate and competing bill elaborating the plans by the two casino-operating Indian tribes, plans two years in the making, to jointly open a third, off-reservation casino north of Hartford, to compete with one being built by MGM Resorts in Springfield, Mass.
One bill or the other, or maybe neither, could succeed in the committee, with a yes vote by the committee moving the question to the full General Assembly.
And so begins the casino wars of 2017, as the legislature, in a session dominated by the state's growing fiscal crisis, may take up the issue of how and by whom casino gambling in Connecticut will be conducted in the years and decades to come and how much that gambling might generate for the state.
The opening of new horizons to explore the state's casino gambling future seems to grow from astute lobbying by MGM to stop the tribes' plan for a border casino in the north, one aimed at keeping Connecticut gamblers from migrating to MGM's new $950 million downtown Springfield casino resort.
MGM has so far outmaneuvered the tribes here on their home turf, undermining the tribal plan with cogent arguments about the legality of issuing a new no-bid commercial casino license without a competitive process.
MGM also has made lawmakers focus on the perils of allowing the tribes to operate an off-reservation casino and how that might affect the federally supervised compact requiring them to pay the state a share of their on-reservation slot machine revenues.
So far, the only official opinion from the state's attorney general is that the tribal plan could indeed imperil the agreement that forces the payment from tribal slot machines to the state.
Naturally, the tribes will not welcome the consideration of legislation that would allow competition for a new casino license. Why would they, when they were planning to claim it without a fight?
But there could be a silver lining for eastern Connecticut should the state remake the gambling landscape, allowing, for instance, a big casino near the New York metropolitan area, maybe Bridgeport.
In that event, the tribes would be off the hook for paying the state a share of slot machine revenues, since the payments are dependent on the agreement that also gives them a duopoly.
That's a lot of money, hundreds of millions of dollars a year, that they would be free to reinvest in their properties here in eastern Connecticut.
After all, should the tribes succeed in getting permission for an exclusive border casino to the north, and invest there, it's not clear that the reservation casinos here won't continue to shrink, even though the tribes' bottom lines might be hurt less.
If the tribes were left with only their existing casinos in Connecticut, with no obligation to pay the state, they would be under more pressure than ever to continue to develop them as full resorts, destinations that would appeal to gamblers from New York, Massachusetts and other parts of Connecticut who will have more gambling closer to home.
It would put more urgency in the Mohegan plan to develop resort attractions at Norwich Hospital in Preston. Negotiations for a final agreement for the tribe to purchase Norwich Hospital appear to be stalling.
Then again, if the legislature were to agree to a competition for a new or even several commercial casino licenses, the tribes might decide to throw a hat into that race.
Uri Clinton, legal counsel for MGM, told lawmakers last week that the state could expect to generate a lot of fees from a licensing contest and attract big players who might be willing to shoulder substantial licensing fees, gambling taxes and payments to host communities.
In that event, the tribes could win the contest and end up running a third casino near the northern border after all and maybe one in Bridgeport, too.
Either way, whether one of these bills gets out of committee, or nothing happens and MGM just opens, there will be a lot of challenges ahead, filling all those seats at gaming tables and slot machines at Foxwoods Resort Casino and Mohegan Sun.
This is the opinion of David Collins.
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