In Connecticut, the long-running effort by MGM Resorts International to stop the passage of proposed legislation that would allow the state to open a third tribal casino took another turn yesterday after the firm’s representatives delivered a warning penned by Kenneth Salazar, the former United States Secretary Of The Interior.

Also a former Democratic United States Senator and Colorado Attorney General, Salazar oversaw the Bureau Of Indian Affairs for five years under the administration of President Barack Obama and now works for law firm WilmerHale, which has offices around the world including in Washington, DC.

The two-page warning handed to Brian Durand, Chief Of Staff for Connecticut governor Dannel Malloy, and general counsel Karen Buffkin by Uri Clinton, Senior Vice-President for Las Vegas-based MGM Resorts International, and lobbyists Paul Nunez and Jane Murphy expressed Salazar’s legal opinion that passing the proposed legislation would jeopardize the eastern state’s current revenue-sharing agreement with the Mohegan Tribal Gaming Authority and the Mashantucket Pequot Tribal Nation.

MMCT Venture, which is a joint enterprise of the Mohegan Tribal Gaming Authority and the Mashantucket Pequot Tribal Nation, is seeking permission to build the third Connecticut casino in the town of East Windsor but the proposed location is only around 13 miles from Massachusetts’ MGM Springfield development, which is expected to open in 2019 complete with a 125,000 sq ft casino offering up to 3,000 slots and 75 gaming tables. MGM Resorts International has been lobbying against the proposed Hartford County venue due to the fact that it would have been awarded a license in the absence of a competitive bidding process open to other operators.

MGM Resorts International has long expressed an interest in building a gambling establishment in south-western Connecticut and contends that the state should allow other firms to vie for the third license.

For their part, the Mohegan Tribal Gaming Authority operates the giant Mohegan Sun casino in south-eastern Connecticut while the Mashantucket Pequot Tribal Nation is responsible for the nearby Foxwoods Resort Casino and both have previously stated that their planned Hartford County venture would serve as a defensive measure against the competitive threat posed by the coming $950 million MGM Springfield.

“First they paid former Attorney General Eric Holder [and] then they paid former [United States] Senator Joseph Lieberman [and] now they’re paying the former Secretary Of The Interior,” read a statement from MMCT Venture spokesperson Andrew Doba. “What does it add up to? That MGM [Resorts International] is willing to pay anyone and everyone to stop our project from moving forward because they know our proposal is going to keep jobs and revenues in Connecticut.”

As part of a deal struck with former Connecticut governor Lowell Weicker more than 20 years ago, the Mohegan Tribal Gaming Authority and the Mashantucket Pequot Tribal Nation were given the exclusive rights to operate slots in the state in exchange for handing over 25% of the machines’ annual gross revenues to the state. This amount reached as high as $430 million in 2007 but fell to $262 million last year and Salazar’s legal opinion states that this arrangement would be threatened should the tribes open their East Windsor casino.

“I believe there is a substantial risk that the tribes’ proposed amendments would not receive the requisite approval in which case Connecticut’s entitlement to the 25% revenue stream would likely terminate,” read Salazar’s letter.

Salazar moreover explained that any revisions to the current revenue-sharing arrangement between the state and tribes may moreover not be approved by the Bureau Of Indian Affairs due to the length of time the original deal has been in place and the rate of forfeiture.

“In my opinion, there is a significant chance that such a review, even if it did not produce an outright termination of the 25% revenue entitlement, would lead the department to require a reduction of the 25% royalty provision in the current compact,” read Salazar’s letter. “That is because the 25% rate is unusually high. In fact, it is higher than the rate in the overwhelming majority of Indian gaming compacts and the department has repeatedly disapproved even lower rates.”

Concerned about the possibility of just such an outcome, last week saw Malloy send a letter to Connecticut Attorney General George Jepsen asking the state’s most senior attorney to weigh in on the potential impacts of the proposed legislation.

“We have requested a formal opinion from Attorney General Jepsen’s office,” said Kelly Donnelly, spokesperson for Malloy. “One of the specific issues we are seeking its guidance on is regarding the risks associated with amending the compact. We look forward to its response to our request.”

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