Greater Hartford business groups aren't embracing planned casino | Crain's Connecticut

Greater Hartford business groups aren't embracing planned casino

The tribes who run Foxwoods Resort Casino (above) and Mohegan Sun hope to build a $300 million casino in East Windsor. | Photo via Creative Commons

As crucial votes for Connecticut’s third casino move forward, leading business groups remain neutral on the project — while casino developers describe it as one of the largest private sector investments in years.

The MetroHartford Alliance, the Connecticut Business and Industry Association and the Capitol Region Council of Governments, which represents 38 municipalities including East Windsor, where the planned casino has been designated for development, have not taken positions so far.

“At this point we have not taken any position on this issue and I do not anticipate that we will,” said Brian Boyer, a spokesperson for the MetroHartford Alliance, whose membership includes Aetna, Eversource, Stanley Black and Decker and United Technologies, among other major Connecticut employers.

Representatives for the CBIA and the Capitol Region Council also confirmed separately that their organizations had no formal position on the casino.

The $300 million project is a joint venture of the Mashantucket Pequot and Mohegan tribes, who operate Connecticut's existing Foxwoods and Mohegan Sun casinos, respectively. Operating under the name MMCT, the tribes' publicly stated main aim is to prevent Connecticut gambling dollars from escaping across the border to a planned Springfield, Mass., casino being developed by MGM Resorts International.

MGM, which plans to open its $950 million casino next year, has been highly critical of MMCT’s management of the process, some say to protect its anticipated market. The Las Vegas-based company has expressed interest in creating Connecticut’s first non-tribal casino through what it calls a “fair” and “competitive” process, and in a March 1 press release, said the East Windsor agreement is not the best Connecticut can do.

“If Connecticut is truly interested in maximizing jobs and revenue, this deal isn’t the answer; not even close,” said Uri Clinton, MGM Resorts International’s senior vice president and legal counsel. “We have said consistently … that a commercial casino license in Connecticut has great value. By allowing the developer to set the terms of this deal, the state is selling itself short, and leaving money on the table. And Connecticut can ill afford to do that in the midst of an enormous budget shortfall.”

How much MGM’s criticism may be hurting MMCT’s reputation among Greater Hartford entities is not clear.

But Andrew Doba, a spokesperson for the venture, said the Hartford business sector should find plenty to like in the planned casino. As evidence, he cited a report by gaming industry expert Clyde Barrow. In the report, which was commissioned by the two tribes planning the casino, Barrow predicted that a new casino would generate $337 million in annual revenue and help prevent large-scale job losses at Foxwoods and Mohegan Sun.

“The project will, without question, stimulate the regional economy,” Doba said, referencing Barrow’s projections. “Whether it’s construction jobs initially or the thousands of permanent jobs at the casino or the local vendors who will help service the facility, everyone stands to benefit.”

Doba also pointed to the tribes’ record in New London County when explaining the future benefits for the area between Hartford and the Massachusetts line.

“The roughly $300 million investment will be one of the largest pieces of private sector investment the region has seen in a long, long time,” he said. “And as they’ve done in southeastern Connecticut, both tribes will become part of the fabric of the community, helping through charitable work and volunteer opportunities. We look forward to working with the community both locally and throughout the region.”

The neutrality being shown by the leading business organizations of Greater Hartford may stem from a lack of interaction with the tribes and their casino employees, said Tony Sheridan, president and CEO of the Chamber of Commerce of Eastern Connecticut.

Foxwoods, which is celebrating its 25th anniversary this year, and Mohegan Sun, which turned 20 last year, are “good corporate citizens” that have been members of the Waterford-based chamber since their inceptions, he said.

“[Hartford-area entities] probably don’t know them the way we know them,” Sheridan said. “[Tribal members] were very engaged in the community before they became well off. They continue to be great assets in our community. East Windsor has made a smart decision to embrace them.”        

Although Foxwoods and Mohegan Sun have worked on casino projects in other states, the East Windsor project is novel for Connecticut in that it would be built on non-tribal land now home to a vacant movie theater and Wal-Mart building. The current Foxwoods and Mohegan Sun casinos are on Indian reservations and are recognized by the U.S. government as such.

Attorney General George Jepsen's office says there are complications for any entity, including the Foxwoods/Mohegan venture, wishing to establish a casino on non-tribal land.

“Casino gambling is illegal in Connecticut,” said Falkowski, the attorney general’s spokesperson. “Legislation would be necessary for a gaming facility to be legally opened on non-tribal land.”

Alan P. Meister, principal economist at California-based Nathan Associates Inc. and author of the annual Indian Gaming Industry Report, largely agrees with Jepsen. Meister said that selection of a non-tribal operator would necessitate Connecticut creating an entirely new regulatory structure for what’s known in the gambling industry as “commercial gaming.”

“A commercial casino in Connecticut not operated by one of the two tribes would be a dramatic change in existing public policy,” he said. “It would change the gaming landscape in the state. And the tribes would not need to make their revenue-sharing payments either.”

The casino landscape is further complicated by two bills under consideration in the General Assembly’s Public Safety and Security Committee. One bill would open the process to other developers besides Foxwoods and Mohegan Sun, while the other bill would approve the plan as conceived by the MMCT joint venture.

If another developer is chosen, that would reverse years of casino policy dominated by the Foxwoods and Mohegan Sun duopoly. If other casino entities are allowed to set up in Connecticut, the tribes have said they would stop paying their 25 percent slot machine contributions, as agreed to under a longstanding compact with the state.

In 2015, Foxwoods paid Connecticut $121.3 million while Mohegan Sun paid $146.7 million, according to statistics kept by the Connecticut Department of Special Revenue. In all the years the casinos have been operating through 2015, the state’s take has been $6.96 billion, although the annual amounts have been waning since the Great Recession.

Meister cites Mohegan Sun’s Pennsylvania racetrack/casino as an example of how a tribe could own and operate a casino on non-tribal land.

“There are some tribes that already operate commercial gaming facilities, thus not as Indian gaming under federal law,” Meister said. “In those cases, tribes typically pay traditional state gaming taxes.”

There are 12 states including New York that have both Indian gaming and commercial gaming, Meister said. There are 28 states including Connecticut that have some form of Indian gaming, he said.          

March 6, 2017 - 11:50am