Connecticut Tribes Shelve Satellite Casino For Now

Connecticut’s Mohegan and Mashantucket Pequot tribes, who operate the Mohegan Sun and Foxwoods casinos, have “temporarily” shelved plans for their Tribal Winds satellite casino project (l.) in East Windsor. Meanwhile, sports betting in Connecticut has moved a step closer.

Connecticut’s two gaming tribes have “temporarily” shelved a joint venture known as Tribal Winds, a satellite casino project planned for East Windsor.

The announcement, made December 2, recognizes the reality that the existing tribal casinos, Mohegan Sun and Foxwoods, have been operating at 25 percent capacity due to the ongoing pandemic. The gaming authorities reserved the right to revive the project at a later date.

Tribal Winds has hampered a political agreement that also includes lawmakers representing the largest city in the state, Bridgeport. Connecticut Governor Ned Lamont has always insisted that such an agreement was central to achieving an omnibus gaming bill.

MGM Resorts International, which operates the MGM Springfield, a dozen miles away, in Massachusetts, has fought the Tribal Winds casino by every means, legal and political, at its disposal. MGM has so far prevented a shovel from being put into the ground for the casino, and Lamont wants that impediment removed. He seeks what he calls a “global” bill.

The Mohegans and Pequots issued a joint statement: “We’ve been through so many ups and downs when it comes to the Tribal Winds project. There have been many moments where it was clear the easiest path would be to just walk away. And while there’s no way we could have accounted for this latest delay, we still believe Tribal Winds is a viable project that will come to fruition once markets improve and we’ve taken concrete steps toward restoring normal business operations.”

The announcement, although it doesn’t mention Lamont’s concerns about potential lawsuits from MGM, silently concedes the point, though MGM is less of a player in Connecticut due to the ravages of Covid-19. The company been forced to furlough or let go thousands of workers, and despite the millions of dollars it spent fighting the tribes, it does not currently have any lobbyists in the state.

Lamont reacted positively to the tribes’ announcement. “I think you know it was a source of aggravation to some of the outside casino places that had objections there,” he said at a press conference. “We’re trying to reach an accommodation where we can get sports betting and even iGaming going in the state—doing it in a way that doesn’t prompt a litigation war of sorts, and we’re trying to work that through. It’s going to take a little bit longer.”

He said he would continue negotiating with the tribes on sports betting but wouldn’t get into the specifics. “I don’t like to negotiate on TV,” he said.

Previously Pequot Chairman Rodney Butler said he would prefer that the state negotiate sports betting as a separate issue. “The easy solution, in the interim, if we can’t figure out all the bigger gaming issues, would just be to have sports betting at Mohegan and Foxwoods, and then we can save the more difficult conversations for down the line,” he said.

The man who will take over as House Speaker after the New Year, Matt Ritter, said the move by the tribes to drop East Windsor for the moment is not a surprise. He told the Hartford Courant, “I hope we are getting close to a deal. If that particular situation in East Windsor helps us get to a deal, that’s great news. … Maybe that’s a sign of where things are going with the governor’s office. I don’t know. Maybe it is.”

Foxwoods is hoping to claw back some revenues lost to the pandemic by its just-announced partnership with DraftKings to offer sports betting once the state legalizes it. The DraftKings-Mashantucket Pequot Tribal Nation deal is multi-channel and makes the Massachusetts-based sportsbook the official daily fantasy sports partner with the casino.

Matt Kalish, co-founder and president of DraftKings North America, hailed the agreement, saying, “This is a landmark deal in collaboration with the Mashantucket Pequot Tribal Nation as well as a critical next step to bringing America’s top-rated sportsbook app to sports fans in Connecticut.

“The national expansion of regulated sports betting is among our top strategic priorities. DraftKings today is live with mobile sports betting in 10 states, more than any other operator in the U.S., and teaming up with the tribe will allow us to extend our reach even further.”

Butler added, “Partnering with DraftKings, the most prominent name in sports betting, reinforces the Mashantucket Pequot Tribe’s position as a leader in the gaming and entertainment industry.” He added, “We’ve proven our ability to shape the future of gaming time and time again, and now we’re ready to drive sports wagering and online gaming for the state of Connecticut. Working through the tribal gaming compacts, we will help bolster our economy with much-needed revenue and virtual entertainment.

“We’ve proven our ability to shape the future of gaming time and time again, and now we’re ready to drive sports wagering and online gaming for the state of Connecticut,” he said. “Working through the tribal gaming compacts, we will help bolster our economy with much-needed revenue and virtual entertainment.”

Jason Guyot, interim Foxwoods CEO, noted that the partnership can begin immediately, even before sports betting is legalized. “DraftKings is a pioneer in the U.S. digital sports entertainment and gaming market,” he said. “Offering daily fantasy sports allows us to bring a new type of compelling and interactive online experience to our passionate sport fans. By combining Foxwoods’ 29-year gaming legacy with DraftKings’ deep digital expertise, we’re well positioned to continue leading gaming advancements in the region and beyond.”

Connecticut legislators have been debating sports betting ever since the U.S. Supreme Court lifted the federal ban on the activity in 2018. Governor Lamont, and both tribes, have always insisted that any legalization must include the tribes—who add their own insistence that they have a monopoly on it.

For more than two decades, the tribes’ compacts with the state have given them exclusive rights to offer casino gaming in return for paying 25 percent of slots revenue to the state. The tribes insist that sports betting is included in the definition of casino games. Some lawmakers and operators of off track betting parlors, are not so sure about that, including a former state attorney general.

Sportech, a UK-based company that owns the state’s rights to pari-mutuel betting, is lobbying for the right to offer sports betting. “It’s still very important to us,” said Ted Taylor, president of Sportech in Connecticut.

DraftKings and the tribe claim that the state could realize $175 million in tax revenues over five years if sports betting is legalized. Of 19 states that now allow sportsbook, DraftKings is operating in 12 of them, including offering mobile sports betting in 10 of them. The company hopes to leverage its association with the tribe into a reach into other New England states and New Jersey and New York.

Rep. Sean Scanlon, who will chair the finance committee, predicts a sports betting resolution, citing “overwhelming bipartisan support.” He notes that sports betting will probably be concentrated on mobile platforms, where much of the economy has gone during the Covid crisis. “The tribes understand that because the economy has changed,” he said. “I think that the stars are aligning.”

One thing that has changed is that Lamont is interested in leading the negotiations, rather than reacting to proposals by the tribes or lawmakers. He has also become open to iGaming, something he had opposed. He told reporters, “If we found out anything in the course of this horrible COVID cycle, more and more of the world is going virtual, more and more of the world is going online. That’s tele-health and tele-learning, but it’s also iGaming and sports betting. And I don’t think you want Connecticut left behind.”

The new money sports betting could generate is attractive, especially since all state governments are running on fumes due to Covid, and the months the two casinos were closed just contributed to that. Forced to operate at reduced capacities, their revenues have never approached pre-pandemic figures.

Longtime tribal ally Cathy Osten, the state senator whose district includes both casinos, told reporters, “Two of our largest employers have laid off many workers and the associated vendors with those two large employers have laid off many members, that’s what’s driving most of the issue in Norwich region.”

The bill she carried earlier this year would have given the tribes exclusivity on sports betting, plus opening a casino in Bridgeport and allow casino games on mobile platforms.

In a related development, Foxwoods is reacting to declining holiday traffic by temporarily closing the Fox Tower Hotel. It is also cutting casino hours and closing a casino it had opened for patrons over the age of 55, while furloughing 130 employees. Responding to a drop in traffic, Foxwoods, has announced the temporary closure of the Fox Tower Hotel, the cutting of casino hours, and the closure of the 55 and older casino, the Rainmaker, plus the temporary furloughing of 130 workers.

Guyot sent a memo to employees that said “the continued spread of the Covid-19 virus throughout our region has led to increased public concerns and continued state restrictions, which have all resulted in significantly reduced business volumes for us here at Foxwoods Resort Casino.” The casino is, in essence, returning to its Phase 1 reopening plan, which was used when the casino reopened in June, following a nearly three month shutdown mandated by Covid-19.

Besides shutting the casino on weekdays and only opening gaming Fridays through Sundays from noon to 2 a.m., the Grand Theater’s shows have also been curtailed for the time being. Bingo will be closed Mondays and Tuesdays and the Great Cedar Hotel will be closed midweek, although the Grand Pequot Hotel will stay open.

The casino resort has been hurt by restrictions on travelers from Massachusetts, which has always provided a large percentage of its patrons. The CEO emphasized that Bay Staters are always welcome to stay “multiple nights,” however currently Connecticut requires some residents from out of state to quarantine for 14 days or provide evidence of a negative test result for the coronavirus.