U.S. Department Of Interior Stands Between Connecticut And Its Third CasinoFormer DOI Secretary Vetoed Agreement By Tribes To Amend Compact With The State |
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Connecticut’s two casino operators have agreed to a partnership to bring a third casino to the state. The federal government, however, is standing in their way of building a casino in the Hartford area.
The Mashantucket Pequot and the Mohegan tribes run the state’s only two casinos, Foxwoods and Mohegan Sun, both of which are located in the southeastern region of the state, about an hour southeast of Hartford, the state’s capital.
When MGM Springfield opened last year 30 minutes north of Hartford and on the other side of the border in Massachusetts, both tribes recognized the casino as a major threat to their market. They decided to work together in a joint venture to open a casino in East Windsor, just north of Hartford. They proposed the idea to the state legislature, which agreed to the deal.
The US Department of Interior, the federal agency that is in charge of Native American affairs, however, isn’t letting the tribes break ground on the new property just yet. In order to build what would be called Tribal Winds Casino in East Windsor, the DOI needs to approve an amendment that the two tribes have with the state.
Former Interior Secretary Ryan Zinke would not approve the changes.
Zinke is no longer serving, having resigned at the start of the year to work for an investment company focused on blockchain technology, but federal courts have already upheld his decision. A judge ruled last September that the tribes have no legal standing to force the DOI to accept their revisions to the state’s compact.
Zinke was the subject of many probes during his time as secretary, leaving many feeling that his decision was based more on politics than anything else.
Some lawmakers in the state are pushing for legislation that would allow Connecticut to move forward with the casino without getting federal approval. Cathy Olsen, a Democrat from Sprague, is one of the leading voices on the matter.
“There was some stymieing at the federal level that was political in nature more than policy,” Olsen told the Hartford Courant.
Outgoing Connecticut Attorney General George Jepsen advised against moving forward without federal approval. William Tong, who has taken his place, was asked by lawmakers to review the issue.
Even if the two tribes are able to break ground on the state’s newest casino, there is no guarantee it would be a success. MGM Springfield projected to bring in $412 million in gross gaming revenue over the first year. In the first five months, they aren’t even close to halfway there, having generated just $101.5 million.
According to Peggy Holloway, an analyst at Moody’s Investors Services, there are several reasons for falling short of the projections. Holloway told the Courant that bigger casinos typically take 24 months before revenue plateaus due to overspending early on in the process. She also noted that Springfield is a city in economic decline and that the region may be experiencing over-saturation in the casino industry.
More casinos will be opening throughout Massachusetts in 2019. Encore Boston Harbor is tentatively scheduled to open in June, pending the Massachusetts Gaming Commission’s investigation into the company following Steve Wynn’s sexual misconduct allegations.
With gaming expansion in the state to the north, Connecticut officials are expecting a decline in casino revenue over the next few years. Currently, they are estimating that the proposed Tribal Winds Casino would generate $75 million each year for the state.
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