MGM Resorts Drops Interior Department Lawsuit Regarding Connecticut Tribes

Posted on: June 16, 2021, 08:08h. 

Last updated on: June 16, 2021, 10:38h.

MGM Resorts has withdrawn its lawsuit against the US Department of the Interior (DOI) after Connecticut reached new Class III gaming compacts with its two Native American tribes. 

MGM Resorts East Windsor Connecticut
Demolition of the abandoned Showcase Cinemas in East Windsor, Ct. is seen in 2018. The site was once to be the location of a tribal casino in Connecticut, something MGM Resorts contested in federal court. (Image: Hartford Courant)

The updated terms do not include allowing the Mashantucket Pequot and Mohegan tribes to build a new land-based casino off their sovereign land. The contracts specifically prohibit a casino from being built in East Windsor, Ct., for the next 10 years.

MGM filed its lawsuit against the DOI after Connecticut in 2017 passed legislation allowing the tribes to jointly construct a casino in East Windsor. The facility, projected to cost in the neighborhood of $300 million, was tailored to prevent gaming dollars from flowing across the Connecticut-Massachusetts border to MGM’s $960 million integrated casino resort in Springfield, Ma. 

MGM sued the DOI after the federal agency signed off on the revised gaming compacts that allowed the tribes to build the tribal casino in East Windsor on non-sovereign land. In a weekend filing made in DC’s federal district court, MGM said it was dismissing its DOI lawsuit “without prejudice.”

Case Dismissed

MGM Resorts filed its litigation against the Interior Department in 2019. The company’s Massachusetts casino, MGM Springfield, opened in August of 2018.

The casino giant argued in court that Connecticut lawmakers and then-Gov. Dannel Malloy (D) had no legal authority to allow the tribes to operate casinos on non-Native American land. MGM said the DOI erred in approving the new terms.

MGM also argued that Connecticut essentially legalized commercial gambling, and that can only be done in the state through a ballot referendum. To complicate matters, MGM said if the state would have held a competitive bidding process for its expansion of gambling, it would have been interested in building a $675 million integrated resort in Bridgeport.

The tribes formally abandoned their East Windsor project last December. The decision came as a result of the tribes entering into negotiations with the current Gov. Ned Lamont (D) regarding permission to operate sports betting and online casino games.

A motion to allocate $3 million annually to East Windsor in the state’s budget as compensation for the casino project being terminated was removed from the implementor bill today.

Lamont Opposed East Windsor

Lamont, unlike his predecessor Malloy, took a hard stance against the East Windsor project after becoming governor in 2019. He instead favored allowing the tribes to run sportsbooks and iGaming platforms.

“This is something that’s going on all around us, and I think Connecticut should participate,” Lamont said in December. “If we found out anything in the course of this horrible COVID cycle, more and more of the world is going virtual, more and more of the world is going online.

That’s telehealth and telelearning, but it’s also iGaming and sports betting. And I don’t think you want Connecticut left behind,” the governor added.

Connecticut is hoping sports betting and iGaming will help offset some of the massive tax revenue declines that slot machines at Foxwoods and Mohegan Sun have delivered over the past 15 years. 

Connecticut receives 25 percent of the tribes’ gross gaming revenue from slot machines. Under the new compacts, sports betting win will be taxed at 13.75 percent, and the state’s cut of the iGaming revenue will be 18 percent for the first five years, and 20 percent thereafter.