Supplier News
US – MGM takes legal action over Connecticut exclusion
By Phil - 5 August 2015
MGM Resorts has filed a lawsuit in the US District Court to challenge what it claims is racial discrimination in limiting a new casino project near the Connecticut border to two tribal casino operators.
The Las Vegas giant, which had once partnered with Foxwoods in Connecticut, is questioning a newly enacted Connecticut law that gives two Indian tribes; Foxwoods and Mohegan Sun, the exclusive right to jointly develop and operate a competing third casino aiming to stem the flow of customers to Massachusetts.
MGM is currently building its own $800m resort casino in Springfield, Massachusetts. It wants the federal court to declare the law ‘invalid, null, and void in its entirety’ claiming it violates the US Constitution’s equal protection clause as well as the spirit of the federal Indian Gaming Regulatory Act, which limits tribal casinos to reservation land.
MGM Resorts International President Bill Hornbuckle said: “This special law prevents everyone else from competing or even from making an alternative proposal that could be of greater benefit to the state. We believe that everyone should be given an equal opportunity to compete.”
MGM’s lawsuit added: “The Act allows only the Preferred Tribes to engage in negotiations and sign a casino development agreement with a municipality. The Act excludes all other entities, including MGM, from competing with the Preferred Tribes to negotiate such a development agreement and presenting such an agreement to the legislature for approval (and so also excludes MGM and all others from the subsequent establishment and operation of the commercial casino gaming facility). MGM is ready, willing, and able to compete for the opportunity to develop a commercial casino gaming facility in Connecticut, but is excluded by the act from competing for this opportunity. There is no constitutionally legitimate basis for the act’s discrimination in favour of the preferred tribes and against all other potential bidders ”
Mohegan Tribal Council Chairman Kevin Brown and Mashantucket Pequot Tribal Chairman Rodney Butler replied: “We are not at all surprised by MGM’s actions today and frankly suspect we will see more tactics just like this in their effort to stop Connecticut’s leaders from protecting Connecticut jobs and revenue. Our tribes feel an obligation to stand alongside Connecticut’s leaders and fight for our state. MGM has made clear from the beginning that their entire project is based upon a single foundation: exporting Connecticut’s revenues and jobs to Massachusetts.”
The tribes are currently allowed by the state and federal governments to operate casinos on their reservations in Uncasville and Ledyard in Connecticut.
MGM, however, believes the Connecticut law discriminates on the basis of race or ethnicity against other potential casino developers by limiting development rights to two federally recognised tribes.
Connecticut Senate Majority Leader Bob Duff slammed the lawsuit, saying it ‘smacks of desperation.’
“We shouldn’t be intimidated by MGM, and I’m certainly not going to let the thousands of employees who have good wages, good health benefits, retirement plans, get caught up in some sort of bullying tactic by a private company,” he said.
David Bednarz, a spokesman for Connecticut Governor Dannel Malloy, added: “While we will be reviewing the lawsuit, we believe in protecting Connecticut jobs.”
MGM has conducted preliminary studies into the feasibility of developing a casino in Connecticut and found that such a project would be beneficial for the company.
“MGM is also not as a practical or economic matter precluded from developing a casino in Connecticut simply because MGM Springfield is located near Connecticut,” the filing added.
