MGM Resorts Official Blasts New Tribal Gaming Alliance as Continuation of an Illegal Gaming Act
An MGM Resorts International official called the recent signing of a political and economic alliance between the Mashantucket Pequot and Mohegan tribes of Connecticut “the result of an illegal and unfair gaming act”. MGM Resorts’s statement came as a reply to last week’s news that the two Native American tribes had signed a deal to build a joint satellite casino on the border of Connecticut.
The satellite casino is a direct challenge to MGM Resorts Springfield Casino in Western Massachusetts. The Las Vegas gaming company won the right to build an integrated resort casino in Springfield. When opened, many in Connecticut had feared the competition would harm the existing casinos of the Mashantucket Pequot and Mohegan tribes (the Foxwoods Casino and Mohegan Sun, respectively). The satellite casino is thus a firewall to keep Connecticut gamblers in-state.
$300 Million Casino Plan
The new casino is going to cost about $300 million to build. Once completed, it will include 150 table games and 2,000 slot machines. That makes it a fairly large gaming venue, though one stripped down of many amenities.
Before presenting the idea to the Connecticut legislature, the tribes commissioned a study on the economic impact of the new casino. The research showed that the casino would generate $78 million in revenues each year, while employing 6,000 people.
Tribal Officials’ Quotes
When the two tribes signed their accord last week, Mohegan Tribal Council chairman Kevin Brown said, “With our partnership solidified, we can begin the hard work of protecting both Connecticut jobs and the critically important revenue our organizations provide to the state.”
Mr. Brown added, “Outside interests have made it perfectly clear that their business model depends on taking money and jobs from our state. We’re not going to let that happen without a fight.”
Mashantucket Pequot Tribal Council chairman Rodney Butler said, “This is a proud moment because it emphasizes how we are working for a common goal in mind: the welfare of Connecticut’s workforce.”
Alan Feldman’s Outrage
Alan Feldman, Executive Vice President of MGM Resorts International, saw the transaction in a different light. Feldman responded by saying, “Last week’s announcement was a continuation of an unconstitutional process that does not allow anyone else to make proposals that could result in greater benefits for the state of Connecticut, its residents, and consumers.”
Feldman added, “This is the result of a flawed, closed-door deal that shuts out voters in the approval process, eliminates all competition and doesn’t provide any protections for workers.”
Long Rivalry Put to Rest
It is ironic that a casino would drive the two tribes together. For hundreds of years, the Mohegan and the Mashantucket Pequot Indians have been rivals. That rivalry had long been territorial and military, when the tribes dominated the landscape of Connecticut in pre-colonial times. Later, that rivalry kept the tribes divided as the colonials took their land.
When the Mohegan tribe built the Mohegan Sun casino-resort in 1996, their rivalry became economic. The Mashantucket Pequot or Foxwoods Indians had built the Foxwoods Resort Casino in 1986, and the Mohegan Sun in Uncasville was built to be its great rival. When the Mohegan Sun began renovations on its gaming venue in 2007 and 2008, the billion dollar expansion was set to make the Connecticut tribal casino the largest gaming area in the world.
Economic Troubles Changed the Dynamic
Then the Global Recession hit, just as the renovations were being completed. That was the first of a series of bad breaks for the Connecticut tribes. The New England and eastern seaboard regions began to fill up with tribal and private casinos, so competition began to bite into the older casino’s customer base. The creation of a new type of gaming venue, the combination racetrack-casino or racino, became a major draw on customers from the states of Pennsylvania and New York. The Pennsylvania racinos had slot machines and the New York racinos had video lottery terminals, which are Class II slot machines. Times were hard.
When Massachusetts announced its intention to license up to 3 land-based casinos, it was both an opportunity and a danger. Mohegan Sun entered the licensing process for the Boston-area casino, eventually pairing with Boston racetrack Suffolk Downs for a casino which would sit astride the city limits of Boston and its suburb, Revere. When the people of Boston voted-down the idea of a casino in their city, Mohegan Sun and Suffolk Downs changed the development into a Revere-only casino complex, though valuable time and resources were lost.
Mohegan Sun Loses Boston Casino Bid
The idea behind the Boston-area casino was to retain the large customer base of Bostonians who made the trip to Mohegan Sun periodically to gamble. If the Indian tribe did not win the license, it would lose most of its Boston customers. That is exactly what happened when the Massachusetts Gaming Council turned down the $900 million joint bid by Mohegan Sun/Suffolk Downs and instead went with the Wynn Resorts development project in nearby Everett.
Thus, Boston was lost, which made the retention of Connecticut’s own gaming customers essential. Connecticut state legislators supported a quick bill to allow a casino on the Connecticut/Massachusetts border, which seems to have caught MGM Resorts by surprise and sparked the outrage by Alan Feldman.
