MGM sues the federal government for allowing a new tribal casino to open near one of its resorts.
The company has expressed worry over the Mashantucket Pequot and Mohegan Indian tribes opening a new casino in East Windsor, Connecticut, close to its own Springfield, Massachusetts, venue in the past.
MGM is now arguing that protocols weren’t followed in the application stage and that Connecticut has been biased in favor of the tribes.
Of course, the company is also worried because Wynn Resorts’ nearby Boston venue has already slashed MGM’s profits. The beleaguered casino could do without more competition.
The government is being sued for allowing the project to proceed.
It may be surprising to know that up until 1991, MGM and the tribes were actually in an agreement whereby two tribes were given exclusive rights to operate casinos on tribal lands.
In exchange, Connecticut collected 25% of slot machine revenue. In 2006, MGM and the Pequots partnered at Foxwoods Resort in Connecticut, however, the agreement was dissolved in 2013 as both parties wanted to seek expansion separately in Massachusetts.
MGM won a Springfield bid to open a property just 80 miles of Foxwoods, while the Pequot tribe lost out on its Boston bid to Wynn.
Since then, the tribes have been looking to expand further in Connecticut.
It is claimed that the state sought to give the tribes special privileges when it came to their expansion because it was worried about losing its 25% cut of slot profits.
The tribal casinos have handed over around $8 billion to the state since they began operating.
According to new research, the average American doesn’t understand the odds of winning on a slot machine – so it’s an easy way for casinos to make good money from them.
Connecticut granted the tribes a no-bid contract allowing them to develop a commercial casino off tribal lands in East Windsor, located just 12 miles from MGM’s Springfield property.
It also offered the tribes the right to develop another Bridgeport resort and looked into allowing them to operate the state’s online gambling and sports betting operations.
MGM Resorts has not taken kindly to the state’s generous offer to the tribes, as it too planned to expand in the area.
In the company’s lawsuit, MGM said that barring other commercial interests from competing for contracts violated the U.S. Constitution’s equal protection and commerce clauses.
However, the suit was rejected by both a state and federal appeals court.
MGM Resorts is now suing the Interior Department alongside the Bureau of Indian Affairs, which is charged with implementing the federal Indian Gaming Regulatory Act, claiming that it has violated federal rules.
The lawsuit reads that the state’s new agreements with the tribes ‘confer a statewide, perpetual competitive advantage’ which should be deemed illegal.
It is thought that the casino’s legal efforts will lead to a delay in expansion for either company that may last years.
The tribes have now also sued the federal government, alleging that MGM was working alongside U.S. Interior Secretary Ryan Zinke to postpone the expansion.
The government approved the original deal with the tribes back in December after Zinke resigned.
If, like us, this has all blown your mind – here are 10 casinos you should visit in your lifetime while Connecticut works out its issues. It is much lighter reading!
