CT Casino Employees Converge On Hartford To Talk MGM Springfield Competition

[toc]While MGM Resorts continues construction on its $950 million casino resort in Springfield, MA, the company keeps fighting a legal battle in neighboring Connecticut.

Tribal casinos in CT and MGM continue to spar about a proposed tribal casino in East Windsor, CT. On Wednesday, CT casino employees met with lawmakers in Hartford to voice growing concern about job loss. Workers are increasingly worried the forthcoming MGM Springfield could compromise their livelihoods.

Tribes say 9,000 casino jobs at risk

Employees from the Mashantucket Pequot-owned Foxwoods and Mohegan-owned Mohegan Sun casinos turned up for the Hartford meeting. Foxwoods employee Donald MacPhee explained his greatest concern to local news station WWLP:

“MGM Springfield is competition. Competition is okay. It’s not a big issue. But to bring those jobs back into Connecticut and to bring those monies back into Connecticut, the facility certainly needs to be built where it’s being built.”

The East Windsor project is under fire from MGM. Representatives of the casino company say the state needs to open up the bidding on the new CT casino beyond the tribes. Moreover, the casino conglomerate is pursuing the issue in court, saying the state does not have the legal right to hand the casino project to the tribes.

The Mashantucket and Mohegan partnership (MMCT) claims the only way to save an estimated 9,300 jobs in CT is to greenlight a third tribal casino in the East Windsor area.

Residents of East Windsor support the casino proposal. Furthermore, State Sen. Tim Larson told the Hartford Courant he is behind the plan as well:

“I think it’s a great step forward. It’s important that we save jobs in the state of Connecticut. We’ve done that in the defense industry — Pratt & Whitney, Electric Boat. Now it’s time to do it in the tourism industry.”

MGM proposes alternative casino site in Fairfield County

The tribes say East Windsor is the best site for a casino to protect CT gaming interests and generate revenue. Unsurprisingly, MGM has a completely different take. The Springfiled casino owners claim Fairfield County is a better site for a new venue.

Located near the New York state line, a Fairfield County casino would arguably contend with the increasing casino competition in upstate NY.

In March, MGM offered to pay 30-35 percent taxes on gaming revenue if given the chance to build in Fairfield County. The company claims at those rates, the revenue from a property in Bridgeport would offset losses from Springfield competition.

Tribal consultant Clyde Barrow suggests a Bridgeport casino would need $1 billion dollars in annual gaming revenue to recoup losses from competition. However, Uri Clinton, an MGM vice president, strongly disagrees:

“The report’s conclusion is undermined by the tribes themselves, as they have repeatedly told their investors that the greatest threat to their two current casinos isn’t Springfield — it’s the casino market that could be accessed if there was a commercial casino in southwest Connecticut.”

During a committee hearing last month, state Senate Majority Leader Bob Duff noted the biggest flaw in the Fairfield plan.

“There is a fundamental problem with that proposal,” he explained. “Fairfield County does not want a casino. There are not the votes to pass legislation for a Fairfield County casino.”

Breaking the CT casino monopoly could cost the state

Should the state listen to MGM’s Fairfield proposal and open up bidding, it could prove extremely costly. After all, the existing agreement between the state and the tribes is based on casino exclusivity. In exchange for no competition, the tribes give 25 percent of slots revenue to the state.

If the state breaks the monopoly, the tribes arguably could stop payment on $267 million in annual slots revenue. While a Fairfield casino could arguably offset competition from Springfield, it would not earn enough to recoup such a loss. In other words, the state needs to decide if compromising the existing tribal relationship is worth opening up casino competition.

Effectively, this third casino is turning into a bargaining chip for the tribes. This week, MMCT assured state lawmakers tribes would continue payments if the bill for the East Windsor property passes. Even though the monopoly could compromise the revenue agreement per the AG, the tribes insist they will continue to support the state.

“We’ve said from the beginning that we want to help the state we have called home for centuries,” Mashantucket Chairman Rodney Butler told The Day.

While the tribes seem willing to work with the state, the battle with MGM seems far from over.