Under pressure from Connecticut’s Bridgeport delegation the House approved a bill that could lead to a $500 million casino. The vote was 77-73, reflected regional, rather than partisan rivalries.
The bill faced an uncertain fate in the Senate—where most lawmakers felt there wasn’t enough time to pass it before the legislative session ended on May 9. Supporters conceded as much as the deadline for adjournment approached.
In the House the lawmakers from Bridgeport and New Haven supported the House Bill 5305, the Competitive Process bill while those from the southeastern part of the state, where the Mohegan Sun and Foxwoods Resort Casino are located, voted no.
“Our delegation’s backs are against the wall, and we need to do something about it,” said Rep. Christopher Rosario, who represents part of Bridgeport. “The last time I checked the city of Bridgeport was in the state of Connecticut. … And we are facing death by a thousand cuts.”
The state’s largest city has been harmed by the decline of social services, he says. This has prompted him and other representatives of the city to fight for a process that might land a casino in the city.
The operators of Foxwoods Resort Casino, and the Mohegan Sun, are opposed. Last year the tribes persuaded the legislature to authorize them to build a third, commercial, casino in East Windsor. Operating that casino is contingent upon getting federal approval of the amendment to the state tribal gaming compact that the tribes currently operate under.
The Bridgeport alternative has arisen because MGM Resorts International, which vehemently opposes the tribe’s third casino, last year proposed opening up the state commercial casinos and competitive bidding and started off by proposed a $650 million casino in Bridgeport.
MGM is also apparently at least partially responsible for the fact that the Department of the Interior has so far declined to give the approval for the amendment to the compacts that the tribes seek.
Last week 13 lawmakers, mostly from the part of the state where the casinos are located, wrote a letter to the General Assembly saying that a casino study such as is sought by the Bridgeport representatives “is meant to derail the East Windsor project.”
“Thousands of jobs are at risk,” said one of the signatories. “and hundreds of millions in revenue.” The state expects to collect $274 million in taxes from slots this year, although that number is expected to plummet once the MGM Springfield opens 14 miles from East Windsor.
Senator Cathy Osten, who chairs the Appropriations Committee, said she would fight a casino study in the Senate. “It is a fairness issue for two of our largest employers,” she said.
HB 5305 is a two-part bill that would direct the state’s consumer protection agency to invite casino bids with a minimum investment of $500 million and minimum jobs generation of 2,000. Responses would be due by January 1, 2019.
A casino developer would need to pay a $50 million licensing fee and $5 million application fee and agree to pay 25 percent of profits and a minimum of $8 million each year to the host city.
The bill, says supporters, would only invite bids, and would not authorize a casino, so it would not abrogate the tribal compacts.
Rep. J.P. Sredzinski commented, “We have a lot of members … that really appreciate the free market and want to see what is out there and what Connecticut could get.”
“We need the process to be played out. We need to gather the data and then we will have the information to make a decision,” added Rep. Juan Candelaria, who represents New Haven.
MGM spokesman Uri Clinton issued a statement supporting the bill. “We would like to make significant investments in the community and help spur economic growth in the region and the state. We remain ready and willing to participate in an open, transparent, competitive process, consistent with industry best practices, that offers a chance to compete to do business in Connecticut. … It is the best way for the state to maximize jobs, economic growth and revenue.”
MGM has been strongly lobbying the bill. It promises to build a “destination resort” in Bridgeport with 2,000 jobs, 5,779 indirect jobs and $675 million in investment.
After the House vote Clinton added, “We’re fighting. We’ve got some initial counts that are favorable. We’ve got a long way to go. Just like we had a long way to go in the House. But we’re fighting and the enthusiasm for the process is there.”
Opponents warn that the bill imperils the 25 percent revenue sharing the tribes pay each year to the state. They also accuse MGM of not wanting to build a casino much as to scuttle the one that the tribes want to build in East Windsor.
Rep. Chris Davis, R-Ellington, said MGM is trying to “delay, delay, delay” the tribal casino.
Republican Rep. Doug Dubitsky, added, “Nobody is planning to build a casino in Bridgeport. Nobody. The numbers simply don’t work — not for the casino, not for MGM, not for the state,” he said. “This bill would simply delay the tribe’s East Windsor casino and the state will wind up losing millions of dollars.”
Rep. Joe DelaCruz, using a marriage metaphor, warned, “We lose the kids, the house, the car and everything. There is no middle ground here. If we break the compact, we lose $270 million the next day. That’s a fact.”
“I don’t think there’s one person in this chamber that wants to do something that would put that money at risk,” said Rep. Joe Verrrengia, who supported the bill. “But as leaders, we need to look past today. We need to have the ability to say, ‘OK, this is what our gaming industry looks like today, but what’s it going to look like in the future?’”
Bridgeport Mayor Joe Ganim hailed the House vote: “This vote sends a strong signal to the business community that we support fair play in the marketplace, we support open competition and we open for business.” He added, “If we do invest in real growth on the Bridgeport waterfront, we can attract tourists and investors from the New York City region, the largest metropolitan area in the country, and beyond.”
Several area chambers of commerce have thrown their support behind HB 5305.
Frank Borres president of the American View Productions and chairman of the Bridgeport Chamber of Commerce, declared, “The Legislature owes it to its citizenry to make the best deal possible for its taxpayers. That deal is an open competition for gaming that can bring in the most revenue and quite frankly that’s with a resort that can tap the huge New York market.”
“A project of this magnitude will definitely help our community,” Stratford Chamber Board Chairman Chris Pia told the Stratford Star.
“There are very few projects that have a huge economic impact on entire region as the potential gaming opportunity that would be made available with the passing of HB 5305,” said Jeff Bishop, executive director of the Trumbull Chamber of Commerce.
Despite all this support, most supporters conceded that the bill wouldn’t pass in the Senate in time to become law. They stopped pushing for a vote. Which means the issue probably won’t come up again until the legislature meets in January.
Supporters of the Bridgeport casino said they were encouraged by how far they had gotten with it, given the opposition.
Rep. Steven Stafsfrom of Bridgeport said, “We’re excited about where we’ve brought this this year and we think it gives us some real momentum going into the 2019 session.”
Even if the bill passed the Senate, it is likely that Governor Dannel P. Malloy would veto it.
A spokesman for the governor told the Day, “We will continue to monitor this proposal as it works its way through the legislative process. With that said, Governor Malloy has consistently cautioned that in regards to gaming issues in Connecticut, we must ensure that we are honoring our existing compact with the tribal nations and that we continue to prioritize Connecticut jobs.”
Senator Katherine Osten, who has opposed HB 5305, wondered out loud why the tribes didn’t simply go ahead with building the casino, in spite of the federal foot-dragging. “MMCT should be authorized for construction today,” she said. “They don’t have to wait for federal approval.”
The state Senate is equally divided between Republicans and Democrats and may be about as divided between supporters and opponents of the bill.
Senator Toni Boucher, a Republican, observed of his party’s caucus, “People are all over the place.”
Some who oppose it don’t believe MGM’s casino could provide enough revenue to make up for the 25 percent that tribes would stop paying if the compact is broached.
Andrew Doba, spokesman for MMCT Venture, the tribal gaming authority, referenced that fear: “Any legislator who votes for this bill is going to have to head back to their community and explain why they voted to place millions in funding in jeopardy, funding that helps with providing services and keeping taxes down.”
Attorney General George Jepsen has said that the bill would not violate the compacts. That would only happen, he says, if the legislatures accepts one of the bids and authorizes it to move forward.
Meanwhile MGM found itself defending its $50,000 donation that it made to create a pop-up grocery store in Bridgeport. Some doubted the company’s motives.
I’ve got nothing to defend. This is how we do business,” said Clinton, MGM’s spokesman. “We invest in communities where we want to do business.” He added, “Shame on anyone that would question it without having looked first.”
As part of its campaign to pass HB 5305 MGM sent a busload of people in green MGM T-shirts to the capital. In the first months of 2018 the company has spent $700,000 in lobbying in Connecticut.
IG Investigation
Meanwhile the Department of the Interior’s Office of the Inspector General has begun an investigation of how the department handled the tribes’ applications to obtain approval of the compact amendments.
The investigation follows on the heels of revelations by Politico that provided details on MGM’s extensive lobbying of the department to prevent it from issuing the approval the tribes needed to operate a casino.
Documents show that the department was on the verge of issuing the approvals when orders were issued to halt the process, which left the tribes’ application hanging. The Politico reported prompted several of the Connecticut congressional delegation to request an IG investigation.
Andrew Doba, spokesman for the joint tribal authority MMCT, commented, “We are grateful there’s an IG investigation into this issue because since last fall, none of the department’s actions have passed the smell test. Something clearly happened to pollute the process, which should be problematic for an administration that promised to drain the swamp.”
The law that authorizes the tribes to build in East Windsor also requires the blessing by the department. The law required the tribes to amend their compacts to document that the commercial casino they would be building did not violate the compacts’ guarantee of exclusivity for the tribes. In other words, the law requires that the tribes show they are not violating the compact themselves by operating a commercial casino.
The intense lobbying was only part of MGM’s campaign against a tribal casino that has also included challenges in federal court. MGM claims that the bill was unfair because it did not allow them to compete to build a commercial casino in the state.
While the drama unfolded that led to the House voting on the commercial casino bill, tribal leaders were meeting with lawmakers with a request of their own, to amend the bill passed last year to remove the requirement that the Department of the Interior give the amendment to the compacts its blessing.
Mohegan Tribal Chairman Kevin Brown and Mashantucket Pequot Tribal Chairman Rodney Butler lobbied the lawmakers, meeting with Speaker Joe Aresimowicz.
Brown commented, “Let’s go back to the beginning and see if there’s a way that we can strip that requirement and move forward.” The tribes have always argued that the satellite casino they want to build is a shield against the MGM Springfield stripping away money and jobs.
They have demolished the old Showcase cinema building and are waiting for a go-ahead to begin building the 200,000 square foot satellite casino.
Although the tribes contend that by its inaction the Department has essentially not objected to the amendment, Attorney General George Jepsen has opined that the federal approval is required.
Butler countered, “It’s an opinion, right? And we expect the leaders in the General Assembly to do exactly that, be leaders in a sense, and take that as an opinion and take into consideration what’s in the best interest of the state.”
