Connecticut Senate Approves New Casino, MGM Vows Vengeance

[toc]The Connecticut House of Representatives passed a bill last Wednesday that authorizes the state’s two gaming tribes, the Mashantucket Pequots and Mohegans, to build a $300 million satellite casino in East Windsor. The bill previously passed the Senate in May. It will now be sent to Gov. Dan Malloy.

Malloy hasn’t signaled if he will sign the legislation. Even if he does, the casino might never be built — MGM plans on challenging it, if it becomes law.

Why an East Windsor casino?

The project’s proponents hope the casino will help offset the anticipated cannibalization from new casinos in Massachusetts and New York.

East Windsor is in northern Connecticut, about 15 minutes from the Massachusetts border. The town is less than a half-hour from Springfield, Massachusetts, where MGM plans to open a billion-dollar casino in the fall of 2018.

Both casinos sites are located right on the very busy I-91 roadway.

The tribes likely believe their casino would act as a choke point for travelers who would otherwise drive the extra 30 minutes to Springfield, but wouldn’t drive the extra hour to Foxwoods or Mohegan Sun.

Without the East Windsor casino, MGM Springfield is equidistant or closer than the current tribal casinos for most Connecticut residents. Plus, its newness would likely make it a more attractive destination.

MGM challenging the casino in court

As noted in the opening, the bill will face legal challenges.

According to MassLive.com, MGM Resorts International Senior VP and legal counsel Uri Clinton says his company “will continue to vigorously advocate in the courts as we seek to protect the constitutional rights of any company hoping to do business in Connecticut.”

MGM isn’t necessarily challenging the location of the casino. Rather, MGM opposes the closed process that granted the license to the two Connecticut tribes without considering other proposals.  Clinton commented after the House vote:

“Connecticut missed an enormous opportunity to put in place an open, transparent and competitive casino process, which could have resulted in as much as $1 billion in economic development, the creation of thousands of jobs and a licensing fee paid to the state of up to $100 million,” “What Connecticut got instead was far less than that.”

MGM advocates casino near NY

Of course, MGM would love to see the casino project moved farther from its Massachusetts casino location.

In a June op-ed, MGM CEO Jim Murren let the cat out of the bag about wanting the state to open up its process to commercial casinos.

In the op-ed, Murren calls for an open process. He also makes the case for locating the casino in Bridgeport, which happens to be his hometown.

Bridgeport is in the southwestern corner of Connecticut, about an hour-and-a-half from Springfield. It is only 65 miles from New York City.

Effectively, MGM’s goal is to open up the process not to build a better casino in East Windsor. Its end goal is to build a better casino farther away from Massachusetts though.

As Murren notes in his op-ed:

“Economic analysis has established it is in Connecticut’s best interest to begin a competitive bid process. Connecticut need only look to Massachusetts to see the benefits of an open competition. The industry’s largest companies competed for the opportunity to develop resorts, driving capital investment up by hundreds of millions of dollars above the minimum thresholds set by the legislature.

Connecticut can — and should — reap substantial financial benefits, beginning with application and license fees, through construction and continuing when the doors open.”