Tribes reject Lamont’s grand bargain on gambling

Rendering | Tribal Winds Casino A rendering of MMCT's proposed $300 million casino in East Windsor.

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By Mark Pazniokas and Keith M. Phaneuf | CT Mirror

Connecticut’s two federally recognized tribes have doubled down on their commitment to jointly develop a casino in East Windsor to compete with MGM Springfield, once again rejecting Gov. Ned Lamont’s pitch for a grand bargain that would legalize sports betting and place a tribal-owned casino in Bridgeport without litigation from MGM.

“They are not willing to walk away from the Tribal Winds Casino in East Windsor, a project where they’ve invested nearly $20 million,” said Andrew Doba, a spokesman for MMCT, a joint venture of the Mashantucket Pequot and Mohegan tribal nations.

The statement came in response to a Hartford Courant story saying that Lamont, who has pressed the tribes to abandon East Windsor in favor of Bridgeport, was now trying to entice the them to take ownership of the aging the XL Center in downtown Hartford and establish “casino-style gambling” in the capital city.

Ryan Drajewicz, the governor’s chief of staff, said the status of the XL Center was in no way part of talks with the tribes over sports betting or casino expansion in East Windsor or Bridgeport.

“This is a totally separate, unrelated issue from the ongoing negotiations with the tribes on Connecticut’s gaming future,” Drajewicz said.

The tribes and the administration are at a crossroads.

Talks over how to simultaneously resolve a series of interrelated gambling issues broke down in May, with the tribes declining to give up plans for the East Windsor casino — a stumbling block, in the administration’s view, to heading off a new round of litigation by MGM.

Negotiations are tentatively scheduled to resume later this week, with the initial decision in the hands of the governor: Is he willing to pursue sports betting, while letting MGM and the tribes to fight in court over East Windsor?

“We’ve had ongoing conversations with the tribes since the first day I came into office, either me or my staff doing this,” Lamont told reporters. “Look, let’s face it: the gambling, the internet gambling, the sports betting, that’s all been stuck for many years in the state, and I’m looking around at the rest of the country, I’m looking at our neighboring states and they’re beginning to move ahead. So I’ve got to find a solution that allows us to move ahead.”

HBJ Photo | Joe Cooper

The XL Center in downtown Hartford.

Separately, the governor has explored means other than state bonding to finance improvements to the XL Center, which is owned and operated by the quasi-public Capital Region Development Authority. He has scaled back the scope of state investment that had been planned by the previous administration, while not giving up on modernization.

“I’ve got a priority to fix the XL Center and make that what it should be, as a center for this growing city of Hartford,” Lamont said. “And I’ve reached out to a number of different groups as we think about a public-private partnership, which is the best way for us to do it. It’s not simply a matter of the taxpayers throwing money at the XL Center, but working with a strong partner so it could be as vibrant as it could be.”

The tribes have shown no interest in buying the 1970s-era XL Center, which requires significant investment to keep open as a venue for concerts, minor league hockey and UConn basketball and hockey games. In fact, the tribal casinos have become competitors to the XL Center for major concert acts.

But the tribes have been politically astute, broadening their political support by suggesting an openness to engaging in other entertainment activities in Hartford and other cities.

Doba, the MMCT spokesman, noted a gambling expansion bill filed last week by tribal ally Sen. Cathy Osten, D-Sprague, already calls for an “entertainment zone” in Hartford and two other unspecified locales.

Osten said “entertainment zone” is not synonymous with casino gambling.

“It’s essentially a higher end sports gambling venue, a little bit more than a sports bar,” said Osten, whose eastern Connecticut district benefits from employment at the tribal casinos, Foxwoods Resort and Mohegan Sun. “As of this moment, it doesn’t include table games or slots. It’s to entice the millennial crew to come out.”

The bill filed last week by Osten would grant the tribes exclusive rights to online sports betting in Connecticut, authorize them to jointly operate a casino in Bridgeport and open sports-betting “entertainment zones” in Hartford and two other unspecified communities. It also would allow the Connecticut Lottery to sell lottery tickets online.

The tribes say they already have exclusive rights to sports betting in Connecticut, should it be legalized in any form here. They consider sports betting a casino game, and the state promised them exclusive rights to casino gambling a quarter century ago in return for a slots revenue sharing deal that has produced $8 billion for the state.

The state could play hardball, keeping the tribes from sports betting by refusing to renegotiate its gambling compacts with the Pequots and Mohegans to cover gambling on sports.

Lamont has offered the tribes the rights to sports betting and online gaming if they abandon East Windsor for Bridgeport. The tribes say East Windsor would take customers from MGM Springfield, while a Bridgeport casino would cannibalize the tribes’ own clientele, drawing its Fairfield County and metro-New York customers.

The Osten bill leaves intact the tribes’ right to build in East Windsor.

The General Assembly passed legislation in 2017 that authorizes MMCT to build a casino on a hillside overlooking I-91 in East Windsor, a location chosen to draw amblers who might drive north to Springfield. MGM sued before the bill passed, claiming it would violate the equal protection and commerce clauses of the U.S. Constitution.

A federal court dismissed the suit as premature. MGM has yet to file a new version.

The state’s approval of the East Windsor casino was contingent on federal acceptance of changes to Connecticut’s longstanding gambling agreements with its two federally recognized tribes. The Department of the Interior blocked construction for nearly two years, refusing to take final action on the gambling amendments until March 2019.

The tribes have yet to obtain financing for the $300 million project, and they still are fighting local zoning appeals that they say are financed by MGM.

Rodney Butler, the chairman of the Mashantucket Pequots, said in an interview last week that the zoning fights and a need to reassemble a design and construction team after the long delay have slowed construction, but he hoped work would begin in the fall.

The delay in construction should not be interpreted as the tribes ever considering abandoning the project as part of a negotiation with the administration over sports betting.

“I just want to kill any speculation that delay was over the negotiations,” Butler said.

Both tribes have outstanding debts of $1.8 billion.

Public filings show the Mohegans, which have diversified with casinos in Pennsylvania, Canada and South Korea, having ready access to nearly $200 million in revolving credit, while the Pequots have struggled. They defaulted in 2009, restructured their debt in 2013 and fell into technical default again in 2014. For the past five years, the Pequots have operated under a forbearance agreement with its creditors.