Tribes OK to Compete for Bridgeport
Connecticut’s gaming tribes, the Mohegans and the Pequots, say they would be willing to compete against MGM Resorts for the right to build a commercial casino in Bridgeport, the state’s largest city. If such a casino were built, it would be the fourth authorized in the state.
MGM, for its part, says, in essence, “bring it.”
Meanwhile, the tribes and the state of Connecticut have sued the federal government to be allowed to move forward with the state’s third “satellite” casino, slated for East Windsor.
The tribes, which operate the Mohegan Sun and Foxwoods Resort Casino, are adamant that they want to be part of any discussion of a commercial casino in that city.
Three months ago, MGM floated the proposal for a $675 million casino resort in Bridgeport. December 5, MGM CEO Jim Murren, a Bridgeport native, whose mother still lives in the city, made a presentation to the Bridgeport Regional Business Council to an audience of 375 in which he tried to enlist their support for such a casino.
During that speech Murren called for a revamping of the way the state approaches gaming. “I’m just saying that what worked 25 years ago should be revisited today for the benefit of the entire state,” he said, saying that while tribal gaming should be part of the mix, so should commercial gaming.
“What would it do for the state if the state of Connecticut would modernize its gaming profile? That is a question you should all ask yourselves. If the state of Connecticut concludes that it wants to participate in commercial gaming, which was the conclusion in Hartford, wouldn’t you want to do it in a state-of-the-art way?” he said.
The Bridgeport casino would have a 300-room hotel, 2,000 slots, 160 tables games, a 700-seat theater, shopping and dining. It would require the approval of the legislature and would, almost by definition, break apart the existing tribal state gaming compacts. But in a sense the legislature made the first move in that direction when it allowed the tribes to build a commercial casino.
Murren noted that tribal gaming revenue paid to the state has declined steeply from $430 million a decade ago to $270 million last year.
Initially the tribes derided the proposal, questioning MGM’s sincerity and whether it could even get approval from the state legislature. They pointed out that during a recent conference call with investors Mirren said that the $965 million MGM Springfield—which will open next fall in Massachusetts—would be the company’s last major development in the U.S.
However, this week the tribe began to take seriously the idea that MGM’s proposal might spark interest with some lawmakers. The two tribal chairmen, Rodney Butler of the Mashantucket Pequots and Kevin Brown of the Mohegans, issued a letter reminding officials of the $7 billion they have jointly contributed to the state.
“For more than two decades, our two tribes and the state of Connecticut have forged a mutually beneficial partnership,” said the letter.
“When confronted with a threat to this partnership, you stood strong with us and passed Senate Bill 957 into law during the regular legislative session, authorizing the construction of a new facility in East Windsor. We are moving forward with that project, and want to thank you for your continued support,” says the letter.
The tribes—erstwhile rivals for all those years—are now joined at the hip in a development entity called MMCT Venture. Authorized by the legislature last summer, they have purportedly started work on the state’s third, and smallest casino, in East Windsor. It is designed to suck wind out of the sails of the MGM Springfield 14 miles away by keeping some percentage of players at home.
The letter reminded lawmakers that years ago both tribes asked the legislature to allow them to build three commercials scattered around the state. The legislature showed no interest at the time.
“Back in 2015, our initial proposal would have authorized three new facilities, one in north-central CT, one in the Danbury area and one in Fairfield County. It was the Legislature’s decision to move forward with only one site in the north-central Hartford region,” says the letter.
It adds, “If circumstances have changed and there is now real interest in putting a casino in Bridgeport, we want to be a part of that discussion.”
MGM retorted that it would welcome such a competition. In a letter to Governor Dannel P. Malloy and leading lawmakers, Uri Clinton, MGM Resorts senior vice president and legal counsel, wrote “The Tribes’ request yesterday to be ‘part of that discussion’ is good news for the people of Connecticut. There appears to be, for the first time, agreement that such a discussion is in the state’s best interest.”
MGM’s letter added, “We welcome the tribes’ interest in such a process. MGM has participated in competitive processes in other states, as have the tribes, and we are prepared to do so in Connecticut.” MGM operates 18 casino resorts throughout North America and Asia.
Clinton said MGM is confident it would win such a competition. “We’ve got the best site. If someone else wanted to…make a proposal they’d have to have some deal with someone else who has land.”
MGM has already lined up what it considers to be prime property along the Bridgeport harbor, on the Steel Point peninsula on redevelopment land that includes apartments, retail shopping, a supermarket and other entertainment. Its partner is the RCI Group, developers of the area.
However, MMCT spokesman Andrew Doba reminded everyone that if the state allows commercial competition in the state, that would invoke the clause in the tribal state gaming compact where the tribes must pay 25 percent of their profits—unless they no longer have a monopoly. The tribes have agreed to pay 25 percent for the commercial casino they won the right to operate in East Windsor.
“MGM can say and do whatever they want but the facts are clear. Their project comes with a $1 billion price tag for the Connecticut and ours does not,” he said. It is unclear where Doba got the $1 billion figure, however.
MGM argues that allowing it to operate a casino in Bridgeport would more than make up for the revenue the state would lose by breaking the tribal monopoly. It is also calling for “modernization of gaming policy” in the state, which it says should include a market analysis, heavy license fees, and a “constitutionally sound selection process that would avoid the prospect of litigation with the federal government.”
The last point is a reference to the ongoing, aggressive federal lawsuits that MGM has pursued ever since the tribes appealed to the legislature to allow them to build a casino designed to somewhat blunt the MGM Springfield’s effects on their two existing casinos. MGM fought that legislation tooth and nail and so far, MGM has also lost all of its court challenges to that process, but the implication is that allowing it to participate in the process would end litigation as a potential threat.
The Mohegan Sun last week upped the ante in the contest with MGM by announcing an exclusive three-year partnership with the Webster Bank Area in Bridgeport, the home arena to the Bridgeport Sound Tigers AHL team. The joint venture will bring in concerts, additional sporting events and sponsorships to what is considered an underutilized facility.
Tom Cantone, senior vice president of Sports & Entertainment for Mohegan Gaming & Entertainment, declared, “This is an exciting day as two of the strongest entertainment venues in the state join together. We have had an open relationship with Webster Bank Arena for years and this agreement is a further extension of the long-term partnership we look forward to having with them.”
Mohegan Chairman Kevin Brown added, “Today’s announcement is more than just a partnership with the Webster Bank Arena. It’s a demonstration of our commitment to bringing tourism to all of Connecticut, not just the southeastern corner. It is a commitment to Bridgeport, a city rich in history and culture, to help with the growth and rebirth of the Park City.”
However, the Mohegan Sun President Ray Pineault clarified that the tribe would not be “co-managing” the area with the sports team. He told the Connecticut Post: “It’s hard to say at the moment the exact type of concerts or events that will be brought over as bookings are always subject to the touring schedules of the entertainers and the availability of the venues.”
Bridgeport Sound Tigers owner Jon Ledecky also commented: “Mohegan Sun will help secure concerts that will appeal to the local community, as well as become a visible sponsor in our first-class arena.”
The office of Bridgeport Mayor Joseph Ganim issued this statement: “Mayor Ganim is glad to hear that Mohegan Sun has formed a partnership with the Arena, and that we can soon expect to provide our residents of Bridgeport and surrounding towns with more live entertainment options. This agreement along with the development of the Amphitheatre will help Bridgeport move to the forefront as a destination place for family and friends.”
Howard Saffan, who owned the Tigers and managed the arena until 2015 told the Post that the partnership will solve one competitive disadvantage for the arena and provide “credibility to the arena because Mohegan is a very large marketing arm in the state.” He added, “Mohegan has in their concert contracts a 75-mile radius clause,” that prevents acts that perform at the Sun from performing within that radius. Bridgeport is 72 miles from the Sun.
The tribe also partners with Live Nation, one of the giants of concert promotions. Pineault says the new partners are now talking with Live Nation about what its role will be in the arrangement.
The legislature will reconvene in February, when MGM’s proposal will undoubtedly be discussed.
Rep. Joe Verrengia, who represents Hartford, and who chairs the Public Safety and Security Committee, which oversees gaming, told the Day, “Without question, the issue of casino expansion, particularly in Bridgeport, will be on the front burner of my legislative agenda.” He added, “I think it’s great for the city of Bridgeport and for the state of Connecticut that we now have competing interests in building a casino in Bridgeport.”
The representative told the Day, “It’s interesting that just a few months ago the tribes were dismissing the possibility of casino expansion in Bridgeport. Now, with MGM putting their money where their mouth is, the tribes are interested. My understanding is that MGM has some investments in place (in Bridgeport). Competition is a good thing.”
The two representatives who represent Bridgeport, Christopher Rosario and Ezequiel Santiago, have long pressed for making Bridgeport the site for a third casino.
Asked react to the Mohegan tribe’s latest move, Rosario told the Post: “It’s all gamesmanship now. They’re trying to snipe at each other and get an edge up on each other.”
Verrengia earlier this year supported MGM’s proposal for competitive bidding for the state’s third casino. “At the top of my Christmas list would be getting the tribes and MGM together to work out an agreement,” he said. He said he is open to lowering the amount the tribes pay the state if they drop their objections to other competitors. Of course, the existing compact allows the tribes to stop paying anything to the state if that happens.
Bridgeport’s interest in being a casino dates back to the 1990s when both Donald Trump and Steve Wynn looked hard at the market, which includes Manhattan, 50 miles away. However, then-Governor John G. Rowland said no, although the city itself was dazzled by the thought of money that could be funneled into economic development.
Meanwhile the tribes and the state are moving forward with a lawsuit against Secretary of the Interior Ryan Zinke to force the department’s hand in approving the amended tribal state gaming compact—which the Indian Gaming Regulatory Act requires before the tribes could actually operate their casino in East Windsor.