Public Safety Committee sends two casino bills to full legislature

Hartford — For the sake of more argument, the legislature’s Public Safety and Security Committee voted Wednesday to “move along” both a bill that would authorize the Mashantucket Pequot and Mohegan tribes to develop an East Windsor casino and a separate measure that would instead establish a competitive bidding process that could lead to a third casino in the state.

The bills were referred to the state Senate and the House, both of which would have to approve one of the bills before Gov. Dannel P. Malloy could consider signing it into law.

Ultimately, only one of the bills could be passed.

Committee members, some of whom admitted they liked neither bill, nevertheless voted in favor of both of them in order to keep the casino-expansion discussion alive. Before voting, they caucused privately to consider 11th-hour changes in the bill calling for a competitive bidding process. The revised version of that measure calls for the commissioner of the state Department of Consumer Protection to establish a request-for-proposals process for casino operators interested in bidding on a gaming license.

The bill does not address the issuance of such a license, a step that would require further legislation.

“I would vote ‘no’ on both of them, but there needs to be debate in the House and Senate,” said state Sen. Tony Guglielmo, a Stafford Republican who co-chairs the committee. Rep. Linda Orange, a Colchester Democrat, said she was inclined to support the bill favoring the tribes but voted for both measures “so the conversation can continue.”

The competitive-bidding bill also requires that applicants for a gaming license guarantee annual payments of at least $8 million to the town where a casino would be built and that the residents of that town approve the deal in a referendum. The applicant would have to agree to make a capital investment of at least $300 million in a casino project, and, if chosen, pay a licensing fee of $250 million.

The resulting casino's slot-machine revenues would be taxed at 35 percent while other games would face a 10-percent levy.

Applicants for the license would be required to pay a refundable $5 million application fee, which would be waived for the Mashantucket Pequots and the Mohegans, respective owners and operators of Foxwoods Resort Casino and Mohegan Sun.

Casino expansion in Connecticut has been on the table for more than two years, ever since Las Vegas-based MGM Resorts International began pursuit of a $950 million resort casino in Springfield, Mass. The facility, scheduled to open in September 2018, could have a devastating impact on business at the tribe's casinos in southeastern Connecticut, both of which reported Wednesday that their February slot-machine revenues were down over the same month last year.

The casinos contributed more than $20 million to the state last month in accordance with agreements that require them to fork over 25 percent of their slots winnings. The terms of those agreements could be jeopardized by passage of either of the bills the committee forwarded Wednesday, according to a formal opinion rendered earlier this week by state Attorney General George Jepsen.

The two tribes, which believe the federal government will sanction their plan to jointly develop a “satellite” casino in East Windsor, praised the committee for approving Senate Bill 957, the measure granting the tribes the exclusive right to develop a commercial casino on nontribal land.

The tribes have negotiated an agreement with East Windsor officials that calls for an up-front payment to the town of $3 million and, thereafter, annual payments of about $8.5 million a year.

“We thank the Public Safety Committee for continuing this important conversation,” Rodney Butler, the Mashantucket chairman, said. “There are more than 9,000 jobs and millions in tax revenue at stake for the state. Today’s vote takes us one step closer to keeping both right here in Connecticut.”

Kevin Brown, the Mohegan chairman, chimed in.

“Many people are promising many things this year,” he said. “What we are promising is real — it's founded on an actual track record of partnership with both the state and every city and town in Connecticut, one we hope to continue in good standing for generations to come. We thank the committee for their vote today.”

Predictably, a representative of MGM Resorts lauded the committee’s passage of the competitive-bidding measure, House Bill 7239. MGM, a staunch opponent of the bill favoring the tribes, has indicated it’s interested in pursuing a casino in southwestern Connecticut, where it could tap the lucrative New York City market.

“The committee’s approval of the competitive bill reflects the realization that it offers Connecticut the best way to achieve the greatest reward with the least risk,” said Uri Clinton, MGM's senior vice president and legal counsel. “A market-driven competitive bidding process is how Connecticut generates more revenue, creates more jobs, and drives greater economic development. And an open, transparent, competitive process removes the significant risks outlined by the Attorney General that are inherent in a no-bid, non-competitive award that could jeopardize revenue streams critical to state and municipal budgets.”

State Rep. Joe Verrengia, a West Hartford Democrat and co-chairman of the public safety committee, said that the committee had tried to be as transparent as possible in tackling casino expansion but the subject’s complexity hampered members’ efforts to arrive at a consensus.

“It’s a very, very complex issue,” said state Rep. Anne Dauphinais, a Killingly Republican. “I do believe in an open (bidding) process, so I struggle with voting for 957,” the bill favoring the tribes.

“However, I do think we should renegotiate the compacts with the tribes if we allow them to have a third casino,” she said.

b.hallenbeck@theday.com

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