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    Thursday, May 02, 2024

    Former U.S. official warns governor of 'legal risks' associated with third-casino bill favoring tribes

    MGM Resorts International released a letter Tuesday in which a former secretary of the U.S. Department of the Interior, writing on MGM’s behalf, warns Gov. Dannel P. Malloy that proposed legislation that would enable Connecticut’s two federally recognized Indian tribes to develop an off-reservation casino is fraught with “legal risks.”

    Kenneth Salazar, who headed the department, which oversees Indian affairs, from 2009 to 2013, writes that the law, if enacted, would jeopardize existing agreements that require the Mashantucket Pequot and Mohegan tribes to share their casinos' slot-machine revenues with the state.

    A spokesman for MMCT Venture, the tribal partnership formed to pursue the casino project, dismissed the Salazar letter as “MGM's latest bought and paid for ‘opinion.’”

    MGM has long sought to thwart the tribes’ pursuit of a Hartford-area casino to combat the anticipated impact of the $950 million resort casino MGM is building in Springfield, Mass. The tribes settled last week on an East Windsor site for their proposed $300 million “satellite” facility, which would be far smaller than their respective casinos in southeastern Connecticut, Foxwoods and Mohegan Sun.

    “First they paid former Attorney General Eric Holder. Then, they paid former Senator Joseph Lieberman. Now, they're paying the former Interior Secretary,” the spokesman, Andrew Doba, said in a statement. “What does it add up to? That MGM is willing to pay anyone and everyone to stop our project from moving forward because they know our proposal is going to keep jobs and revenue in Connecticut."

    "By their own math," Doba said, "forty-five percent of the revenue they hope to get for their billion dollar investment is supposed to come from Connecticut residents. That's not going to happen when our facility opens its doors, and they are willing to spend whatever it takes to try and stop us."

    Doba was referring to previous opinions MGM has obtained in fighting the tribes' third-casino plan.

    Holder, in an October 2015 letter to Connecticut Attorney General George Jepsen, called unconstitutional the state law that authorized the tribes to form their partnership and seek casino proposals. Lieberman, a former U.S. senator from Connecticut, represented the Schaghticoke Tribal Nation in its 2016 challenge of the same law, a challenge MGM bankrolled.

    The tribes believe they can jointly operate a third casino through amendments to the revenue-sharing agreements that require them to pay 25 percent of their casinos’ slot-machine revenues to the state. Such amendments would be subject to the Department of the Interior’s approval.

    Based on his experience and work on “Native American legal matters,” Salazar, now an attorney with WilmerHale, a Denver, Colo.-based firm, writes in his letter to Malloy, “I believe there is substantial risk that the Tribes’ proposed amendments would not receive the requisite approval, in which case Connecticut’s entitlement to the 25-percent revenue stream would likely terminate.”

    Salazar’s opinion differs from one a former Interior official provided the tribes nearly a year ago.

    Responding to the tribes’ April 2016 request for “technical assistance,” Lawrence Roberts, then the acting assistant secretary of Indian Affairs, found that the tribes' proposed amendments would not affect their exclusivity arrangement with the state. Roberts indicated that his response should not be construed as “a preliminary decision or advisory opinion regarding compacts or procedures that are not formally submitted to the Department for review and approval.”

    During a recent forum hosted by the state legislature’s Public Safety and Security Committee, the Mohegan Tribe Chairman Kevin Brown said the tribes would seek a formal opinion once the legislature approves a bill.

    Salazar, also a former U.S. senator and state attorney general from Colorado, writes that an Interior review of the tribes’ agreements with the state could jeopardize the 25-percent “revenue entitlement” or lead to a reduction in it.

    “That is because the 25-percent rate is unusually high,” he writes. “In fact, it is higher than the rate in the overwhelming majority of Indian gaming compacts — and the Department has repeatedly disapproved even lower rates.”

    Malloy last week asked that the state Attorney General's Office provide a formal opinion on the risks involved in amending the tribes' agreements with the state. A spokeswoman for the office only would say Tuesday that the governor’s request is pending.

    State Rep. Joe Verrengia, D-West Hartford, co-chairman of the Public Safety and Security Committee, said it’s his understanding that Jepsen’s office is unlikely to issue an opinion before the deadline for legislative committees to forward bills. That deadline is March 16.

    Verrengia’s committee is conducting a public hearing Thursday on two casino-expansion bills — the one that prompted Salazar’s letter and one that calls for an open, competitive bidding process among casino operators interested in a single commercial gaming license. MGM Resorts has championed the latter measure.

    Thursday’s hearing is set for 8:30 a.m. in Room 2B of the Legislative Office Building in Hartford.

    Verrengia said the Salazar letter “brings to the forefront the risks inherent in dealing with the tribes exclusively.” He said the committee eventually could choose to “report out” one of the bills, both or neither. Both chambers of the legislature would have to approve a bill and the governor would have to sign it before it could become law.

    “We haven’t heard much from the governor’s office,” Verrengia said. “When he’s interested in something — like writing to the Islanders — we usually do. But we haven’t heard from anyone. That shows me there’s not a great deal of support (for a third casino) and that could be problematic going forward. If there were (support), it would help the tribes.”

    It was reported last month that Malloy signed a letter pitching Hartford’s XL Center as a temporary home for the New York Islanders of the National Hockey League.

    b.hallenbeck@theday.com

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