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MGM’s lawsuit raises the stakes in Connecticut casino battle

The Boston Globe

Jon Chesto

August 9, 2019

MGM Resorts has upped the ante in its bet on New England’s gambling market with a federal lawsuit to stop a rival from opening in Connecticut, not far from MGM’s new Springfield casino.

This litigation was what Governor Ned Lamont feared would happen. He does not want the state’s future to be decided in a courtroom. But this new suit could be good for the governor. Maybe it raises the stakes enough to finally get a deal done — to resolve the bitter fight between MGM and Connecticut’s two tribal casino operators once and for all.

Lamont’s goal: a global settlement, one that appeases not only MGM and the tribes, but also the state’s off-track betting operators. Any settlement ideally would resolve other gambling issues, with sports betting in particular awaiting legislative action. (Hartford’s XL Center has been floated as a possible sports-betting venue.) But the big money hinges on what happens in the spat over who gets to build the next casino.

The saga has entranced Connecticut for years. The Mohegan and Mashantucket Pequot tribes — operators of Mohegan Sun and Foxwoods — had set aside their own rivalry to team up against a formidable new competitor from Las Vegas: MGM.

Their power move: proposing a $300 million casino 12 miles south of Springfield in East Windsor, Conn., now dubbed “Tribal Winds,” to protect their northern flank. Lawmakers approved that concept in 2017.

MGM fought back with its own plan, to build a $675 million casino in Bridgeport. The city’s highway, train, and ferry access is a big selling point.

Then the tribes courted Bridgeport, Connecticut’s largest city, as well. The end result: a bill filed last week on behalf of the tribes that would give them rights to open in Bridgeport, and exclusive control over sports betting in the state. Lamont, it’s fair to say, is skeptical of the bill’s success — and of the East Windsor plan.

The tribes’ supporters stress the importance of continuing their exclusivity; the state tax revenue stream from the tribes’ slot machines, they say, could dry up if another competitor is allowed on the scene, per rules established in 1990s-era agreements with the tribes. Through it all, MGM promised it would sue to ensure the state opens any new casino license to competition.

On Wednesday, MGM delivered on its pledge. The company sued the Interior Department over its decision to bless the state’s arrangement with the tribes for East Windsor. MGM accused Interior of granting the tribes an illegal monopoly for off-reservation gambling. A spokesman for MMCT, the tribes’ joint venture, responded by emphasizing the tribes’ local roots and saying “MGM pursues litigation because that’s what MGM does.”

If Lamont is lucky, the lawsuit may add some urgency to his negotiations. Lamont just left for a vacation in Maine. A spokesman says he hopes to reconvene the parties in the gambling debate after he gets back in two weeks. He may hold phone calls during his time off to move the talks along, and his aides will continue to coordinate discussions in his absence. Lamont would prefer a resolution soon, possibly in time for when lawmakers return for a special session this fall.

But is there enough money to go around? Gambling experts say the southern New England gambling market may be reaching a saturation point, or possibly even passed it.

Wynn’s new Everett casino hasn’t reported a full month of revenue yet. But MGM’s Springfield operation has repeatedly fallen short of projections, while slots revenue at the two Connecticut casinos declined every month since MGM opened last August. Twin River opened a new casino in Tiverton, R.I., around the same time. And Chicago casino operator Rush Street Gaming hasn’t given up on securing a third resort casino license in Massachusetts, to be used in Brockton.

With all that in mind, success in this market is far from assured. At this rate, the biggest money makers in this high-stakes fight between the tribes and MGM might end up being the lawyers.

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