MGM Resorts International suing Connecticut officials over casino law

MGM filed a complaint about Connecticut's new law in federal court.

MGM Growth Properties LLC would have the option to add the MGM Springfield casino to its portfolio once it's built.

SPRINGFIELD, Mass. (WWLP)– MGM International Resorts has filed a lawsuit against Connecticut’s top officials. The casino developer heading the MGM Springfield project says they are suing because they are being excluded from competing to run a new Connecticut gaming facility.

MGM Resorts International filed a complaint with the federal court in Connecticut on Tuesday, claiming a new state law doesn’t allow them to compete for a license to build in Connecticut.

In the lawsuit’s documents, MGM names top Connecticut officials, including their Governor and Secretary of the State.

Connecticut Governor Dannel Malloy signed the law at the end of June. The law allows the state’s two tribes who already run the two casinos in the state to try for a third, satellite gaming facility. MGM claims that law doesn’t let another tribe or commercial group compete for to head that facility.

In this statement sent to 22News, MGM says they applied to be in the running for that gaming facility in Connecticut, but says the state has now rejected their application.

Connecticut says the law is intended to protect jobs in the state and compete with out-of-state casinos, like the one being built in Springfield.

MGM says that law is unconstitutional, claiming it gives preferential treatment to Connecticut’s two tribes, excluding anyone else from competing to run that facility.

Connecticut’s Attorney General is reviewing MGM’s complaint.

(The entire complaint is available to read below; along with a statement from MGM Resorts International)

MGM Resorts International Global Gaming Development LLC, a Nevada subsidiary, is the plaintiff in the case. MGM said in a follow-up statement that it applied to register a business to compete for the proposed commercial casino in Connecticut but was rejected last week.

In June, Malloy signed into law a bill allowing the state’s two federally recognized tribes, the Mashantucket Pequot and Mohegan tribes, to issue a request for proposals, or RFP, from municipalities interested in hosting a satellite casino to compete with the planned MGM casino in Springfield.

Tribal officials have said they would like to open the new facility along the Interstate 91 corridor in north-central Connecticut. They’ve yet to provide a copy of the RFP to the state Department of Consumer Protection, which would post it publicly. Ultimately, the tribes hope to return to the Connecticut General Assembly with a proposal for a third casino.

The tribes have pushed lawmakers to allow them to open at least one satellite casino to compete with out-of-state casinos and protect jobs at their existing Mohegan Sun and Foxwoods Resort Casinos in southeastern Connecticut. They said they weren’t surprised by MGM’s lawsuit.

“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,” they said in a joint statement. “Our Tribes feel an obligation to stand alongside Connecticut’s leaders and fight for our state.”

Connecticut Senate Majority Leader Bob Duff, D-Norwalk, a chief proponent of Connecticut’s legislation, said the lawsuit “smacks of desperation” on MGM’s part and shows the firm has no business plan to compete with Foxwoods and Mohegan Sun.

“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.

Besides Malloy, MGM’s complaint names Secretary of the State Denise Merrill and Consumer Protection Commissioner Jonathan Harris as defendants. MGM says the law is invalid because it violates the Equal Protection Clause and the Commerce Clause of the U.S. Constitution.

A spokesman for Attorney General George Jepsen said his office was reviewing the complaint and “will respond at the appropriate time in court.”

Jepsen had raised concerns with an early version of the bill in April, warning a third party could claim that giving the tribes exclusive gambling rights beyond their reservation violates the Equal Protection Clause. He also said a third party could claim the earlier legislation violated the Commerce Clause because it granted rights to conduct gambling to protect in-state interests from interstate commerce.

Lawmakers retooled the bill, creating a two-step process that required the tribes to return to the legislature for final approval.

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MGM Resorts International Statement:

A law known as Special Act 15-7 was enacted this year in Connecticut that gives two tribes the exclusive opportunity to develop a commercial casino far from their tribal boundaries. 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 Resorts International this morning filed an action in Federal Court to enjoin the state of Connecticut from further implementing Special Act 15-7.  We are asking the court to rule that the preferential treatment is unconstitutional.

MGM Resorts regularly monitors and analyzes opportunities for growth across the country and around the world.  In that regard, the Act restricts the new opportunity to entities owned by the two Federally-recognized tribes and prevents any other tribal or non-tribal entity from competing for a license.

On analysis, we believe we could offer a highly competitive product for Connecticut that is fully compliant with our obligation in Massachusetts.

Accordingly, we applied to register a business to compete for this commercial casino in Connecticut and just last week received confirmation from the Secretary of State of Connecticut that our application to incorporate pursuant to the Special Act 15-7 was rejected.

We are disappointed by this decision. MGM regularly competes for commercial casino development opportunities and would like to be able to do so in Connecticut.

While our company is supportive of tribal gaming as permitted under the Indian Gaming Regulatory Act, the law passed in Connecticut gives two preferred tribes an unfair and unjustified preferential treatment by designating them as the only entities, tribal or commercial, authorized to negotiate with cities and enter development agreements for a new commercial casino on non-reservation land in Connecticut.

— Bill Hornbuckle, MGM Resorts International President

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