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    Wednesday, April 24, 2024

    Tribes guarantee state a share of proposed casino's gaming revenues

    The chairmen of the Mashantucket Pequot and Mohegan tribes sought Thursday to tamp down fears that the legislature’s authorization of a third Connecticut casino would jeopardize the state’s share of the slot-machine revenues generated by Foxwoods Resort Casino and Mohegan Sun.

    In a letter to Gov. Dannel P. Malloy, Attorney General George Jepsen and legislative leaders, the chairmen guaranteed the tribes would keep paying the state 25 percent of their existing casinos’ slots revenue as well as 25 percent of a proposed East Windsor casino's slots and table games revenues.

    The tribes are pushing the legislature to pass Senate Bill 957, a measure that would enable them to jointly develop the East Windsor facility as a hedge against the competitive impact of MGM Springfield, the $950 million resort casino being built in Springfield, Mass.

    An alternative proposal, House Bill 7239, would establish a competitive-bidding process for a third state casino. It would not, however, authorize a casino.

    “Let us be clear — With the development of a third casino operated jointly by Mohegan and Pequot, we are committed to guaranteeing our existing slot revenue arrangement with the State and are proposing compact amendments that will ensure those revenue streams are preserved,” Kevin Brown, the Mohegan chairman, and Rodney Butler, his Mashantucket counterpart, wrote in the letter. “SB 957 does not jeopardize this revenue sharing, because it is expressly conditioned on approval of the Tribes’ proposed compact amendments.”

    Opponents of the Senate bill have said its passage could jeopardize existing revenue-sharing agreements and invite a lawsuit by MGM Resorts International, the Las Vegas-based operator behind the Springfield project. Jepsen has issued a formal opinion in which he said risks associated with the bill are “not insubstantial.”

    House Speaker Joe Aresimowicz, D-Berlin, said this week the bill has a "50-50 chance" of coming up for a vote.

    Malloy, who largely has avoided the casino-expansion debate, was asked about the tribes’ latest statements during an event Thursday. His office provided a recording of his exchange with reporters.

    “I think it would be very difficult to move forward with respect to designating the tribal nations as operators (of a third casino) unless that issue got dealt with,” Malloy said, referring to the legal questions raised by Jepsen.

    The governor said the tribes’ promise to honor the existing revenue-sharing agreements and to provide a share of a third casino’s gaming revenue “would make a difference ... if the attorney general was able to opine that that would safely secure the state’s position.”

    “I will not ... I don’t intend to put that in jeopardy,” Malloy said of the current arrangement, which provided the state with nearly $266 million in slots payments in the last fiscal year.

    The payments, which steadily have declined in recent years, total nearly $7 billion since Foxwoods and Mohegan Sun opened in the 1990s.

    MGM Resorts International, the Las Vegas-based operator behind the Springfield project and a supporter of the House bill that would establish a competitive-bidding process for a third casino, responded to the tribal chairmen’s pitch.

    “There’s no news here,” Uri Clinton, MGM senior vice president and legal counsel, said in a statement. “What the tribes are saying today is no different than what they’ve been saying for months — to which the attorney general recently responded by saying that even if they try to amend the compact, the Bureau of Indian Affairs could reject their request and nullify the entire compact.”

    Clinton also questioned the tribes’ ability to finance the East Windsor casino, estimated to cost $300 million.

    “The tribes,” he said, “would need the approval of their bond holders to take on all this additional debt — and they’ve not even explained how or if they would be able to secure a letter of credit.”

    b.hallenbeck@theday.com

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