MGM disputes Connecticut law allowing Indian casino development

MGM disputes Connecticut law allowing Indian casino development

MGM is challenging a Connecticut law allowing one of two authorized Native American Tribes to build a casino off their designated reservation.

MGM Resorts International Inc. sued the state of Connecticut on Tuesday disputing a law that would allow one of the state’s two sanctioned Native American Tribes to develop a casino outside of reserved lands but would not permit MGM to bid for the resort.

The suit was filed in Hartford as MGM continues to construct one of the first operational casinos in neighboring Springfield Massachusetts just a few miles from the Connecticut state line. (Reuters report here ).

A federal law drafted in 1998 gave consent for the Mashantucket Pequot and Mohegan tribes to run the Foxwoods and Mohegan Sun casinos on their designated reservations, which granted other tribes to administer gambling establishments on their native lands.

Las Vegas-based MGM doesn’t contest the U.S. Indian Gaming Regulatory Act but instead sites a more obscure law allowing the two tribes to bid for a commercial casino lease off their reservation but discriminates against non-Native American establishments to vie for equal bidding, which they claim violates the U.S. Constitution.

MGM, which bulldozed $10.1 billion in profit last year, expressed in the court filing that “there is no constitutionally legitimate basis for the (state) act’s discrimination in favor of the preferred tribes and against all other potential bidders.”

MGM’s bid for the $800 million casino would be one of three casinos that feature table games, which was allowed in a 2011 Massachusetts law. The law’s supporters believe that the particular placement of the casino would drawn in all competition. “While we will be reviewing the lawsuit, we believe in protecting Connecticut jobs,” said David Bednarz, a spokesman for Connecticut Governor Dannel Malloy, who signed the law in June.

The law protects casinos like MGM from employing a “two-stop strategy,” ubiquitous in the industry to shepherd more gamblers, from constructing two of the same casinos within short distance to one another. The lawsuit drew attention to the Mohegan tribe that tried a similar initiative last year when it propositioned for a Massachusetts casino license.

In a similar case, Wynn Resorts Ltd was chartered to build a $1.75 billion casino outside the Boston area.

Tribal officials expressed concern over MGM’s suit as being selfish. Soon after MGM threatened litigation last month, Mashantucket Chairman Rodney Butler and Mohegan Chairman Kevin Brown said, “This is about siphoning revenues from Connecticut to benefit a Las Vegas company while at the same time moving thousands of existing jobs from Connecticut to Massachusetts.”




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