US Interior Department: Third Connecticut casino would not alter revenue agreement

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The U.S. Department of the Interior has reaffirmed guidance issued last year that Connecticut's revenue-sharing agreement with the tribal operators of Foxwoods Resort Casino and Mohegan Sun would not be affected if the tribes partner in a casino off their reservations.

In a letter Friday to the chairmen of the Mashantucket Pequot and Mohegan tribes, the interior department said the change in presidential administrations — from Barack Obama to Donald Trump — does not change the department's position.

"We confirm that the current administration supports the views in the technical letter," according to the letter, written by James E. Cason, acting deputy secretary of the interior.

However, Cason said the letter should not be viewed as preliminary approval because the expansion proposal has not been formally submitted to the interior department. A proposal cannot be made until the legislature decides whether to back the tribes or open up the process to more potential operators.

Under the state's agreement with the Mohegans and Mashantuckets, the state recieves 25 percent of all slot machine revenue in return for the exclusive right to operate gambling casinos on their reservations in Connecticut.

The tribes pointed to the letter as a boost for their expansion plans. The opening of a satellite casino in East Windsor is intended to dilute the affect of MGM Resort International's $950 million casino and entertainment complex in Springfield, now under construction.

"We've acted in good faith for the last two years," said Kevin Brown, chairman of the Mohegan Tribe. "We've done all the hard work of selecting a site, and are proud to have a staunch ally in the town of East Windsor. With this important confirmation in hand, we urge everyone in the legislature to stand with us as we stand up and fight for Connecticut jobs."

The release of the letter by the tribes drew swift reaction from MGM. MGM has pushed for more casino operators to be allowed to make proposals for casinos in Connecticut, alongside the tribes.

"This is not news — it's a hoax," said Uri Clinton, senior vice president and legal counsel at MGM. "It's just another attempt by the tribes to pull the wool over people's eyes, which means the red flags raised by Attorney General George Jepsen remain as red as ever."

In March, Jepsen sent a legal opinion to Gov. Dannel P. Malloy about how a casino expansion off tribal reservations might jeopardize a decades-old agreement between the state and the tribes. The agreement gives the tribes exclusive right to casino gaming in exchange for the state reaping a 25 percent cut of slot revenue each month.

Jepsen raised the warning even though it would be the tribes, through their MMCT Venture partnership, who would be leading the expansion. Jepsen also was concerned that the Trump administration might take a different stance on the issue.

A Jepsen spokeswoman said Monday the attorney general's office is reviewing Cason's letter but declined further comment.

Casino expansion is among the most controversial issues in the state legislature this session. Some lawmakers have expressed concerns about risking the loss of revenue in the face of competition from Springfield and slot payments to the state that have already eroded. Those payments were once more than $400 million annually, but have fallen to $267 million expected this year.

House Speaker Joe Aresimowicz, D-Berlin, Monday did not comment on how he believes the state should possibly pursue expansion, but he said he sees casinos a vital part of the state's economy.

"This letter is another positive factor to consider as we continue these conversations," Aresimowicz said. "The reality is that gaming is entrenched in our economy, casinos support thousands of jobs in our state and are an important contributor to our overall budget."

The letter released Monday is the latest evidence of a high-stakes battle playing out in Washington, D.C., over possible casino expansion in Connecticut.

Last week, MGM circulated a letter signed by Arizona Sen. John McCain urging the interior department not to issue a second guidance letter. MGM is an aggressive opponent of the state allowing the tribes the sole right to expand at the exclusion of others. MGM also has argued that southwestern Connecticut would be more lucrative, tapping into the New York market.

http://www.courant.com/business/hc-interior-department-tribes-casino-20170515-story.html