A new call for competitive bidding for 3rd casino
As expected, the state’s casino-expansion debate is at full throttle again.
On the eve of the General Assembly's new session, House Democrats announced Tuesday that they’re backing a new call for competitive bidding to determine where the state’s third casino — its first on nontribal land — should be located.
It’s an issue lawmakers seemingly settled a year ago.
The re-opening of the debate comes as bad news for the casino-owning Mashantucket Pequot and Mohegan tribes, which have been preparing to launch development of a $300 million “satellite” casino in East Windsor. But it’s good news for MGM Resorts International, the Las Vegas-based operator poised to invade Connecticut’s gaming space with a nearly $1 billion resort casino scheduled to open this fall in Springfield, Mass.
“The legislative proposal announced today mirrors industry best practices by establishing a truly competitive, open and transparent process,” Uri Clinton, MGM Resorts’ senior vice president and legal counsel, said in a statement. “It would effectively modernize Connecticut’s gaming policy framework, and we are heartened by the growing support for this approach. That’s really all MGM has asked for from day one — a fair chance to compete for Connecticut’s first commercial casino license rather than seeking an exclusive no-bid hand-out.”
The new bill would revoke authorization for the East Windsor casino, which is planned to be built off Exit 45 of Interstate 91, a mere 12 miles from the site of MGM's Springfield casino.
A spokesman for MMCT Venture, the Mashantucket-Mohegan partnership pursuing the East Windsor casino, dismissed the new proposal.
“Let’s call this bill what it is — the MGM Massachusetts Protection Act,” Andrew Doba said in a statement. “A bill that will cost Connecticut $1 billion in revenue and eliminate 4,000 jobs was a bad idea last year, and is still a bad idea.”
State lawmakers representing the Bridgeport and New Haven areas “and others, as well as local elected officials from both cities,” are advocating for the new legislation, the House Democrats said.
MGM Resorts, which has been battling the East Windsor project at every turn, has proposed a $675 million casino on the Bridgeport waterfront.
“We look forward to pursuing this opportunity as soon as the bill passes,” Clinton, the MGM executive, said. “We are fully prepared to present a compelling proposal that will create thousands of jobs, boost the state’s economy and drive tourism, offer significant opportunities for local businesses, and provide substantial revenue to the state and its municipalities."
“And we continue to believe that Bridgeport is the best location for a commercial casino in Connecticut to achieve all of these objectives,” he said.
The bill would establish the first step in a two-step process requiring the commissioners of the Department of Consumer Protection and the Department of Economic and Community Development to solicit proposals for “a proposed commercial casino gaming facility” and to “select a single, qualified responder for the legislature to consider.”
House Democrats say passage of the bill would not jeopardize the revenue stream the state currently derives from the tribes’ southeastern Connecticut casinos: Foxwoods and Mohegan Sun. Under gaming agreements in place for decades, the tribes pay 25 percent of their casinos’ slot-machine revenues to the state in exchange for the exclusive right to operate casinos in Connecticut. If and when that exclusivity is breached, the tribes no longer will make the payments.
“Specifically, the legislation clearly states that no license will be issued to a new casino operator without additional and independent legislative action,” the House Democrats’ statement says.
Rep. Joe Verrengia, D-West Hartford, co-chairs the legislature’s Public Safety and Security Committee, which will consider the new bill.
“I’ve always been steadfast in support of a competitive process,” Verrengia said in a phone interview. “I believe that’s the best way to go. I expect the bill will be fully vetted at the committee level and that it will be voted out of committee. It’s important enough that all legislators should have an opportunity to weigh in on it.”
Verrengia said the climate surrounding the casino-expansion debate fundamentally has changed in two ways over the past year.
First, he said, MGM has “actually put their money where their mouth is” by committing to invest in Bridgeport. The second change, he said, is in “the legal aspect,” a reference to the U.S. Department of the Interior’s failure to approve the state’s amended gaming compacts with the tribes. Interior’s inaction prompted the state and the tribes to file a lawsuit that the department seeks to have dismissed.
“Many legislators were led to believe that approval from the BIA (Interior’s Bureau of Indian Affairs) was pending. We now know that is not the case,” Verrengia said. “We know litigation could go on for some time. With the landscape changing all around us, it’s hard for the state of Connecticut to stay competitive while we’re stuck in a courtroom.”
The proposed competitive-bidding bill would require developers to invest at least $500 million in a casino proposal; employ at least 2,000 people at the casino; and pay the state a $50 million nonrefundable license fee prior to construction. The casino would have to pay the state 25 percent of gaming revenue from slots and table games. An additional 10 percent of slots revenue would be assessed to fund Educational Cost Sharing grants paid to municipalities.
The Mashantucket and Mohegan tribes have indicated they'd be interested in developing a Bridgeport casino if the state were to authorize it.
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