Native American tribes will not be allowed to build a casino near the Massachusetts state line, following a court decision which represents a major victory for MGM Resorts International.
Several tribes had hoped to build a casino near the border area in East Windsor. Such a project required a change in state law to allow a casino on a site that was not located on tribal land. Connecticut Governor Daniel Malloy signed legislation to change the law in June, but the project still needed federal approval to go ahead.
The secretary of the interior refused to grant that approval. The owners of Foxwoods Casino, the Mashantucket Pequot tribe, filed a lawsuit in response, alongside the State of Connecticut. A judge has now dismissed their lawsuit.
What does this decision mean?
This decision benefits MGM Resorts, which recently opened the MGM Springfield in Massachusetts, just 12 miles from the proposed East Windsor site. Because there will be no other casino in the region, more customers will go to the MGM Springfield.
After the decision by the federal judge was announced, MGM Resorts urged Connecticut officials to change gambling laws to allow new commercial casino projects to be open to bids from commercial casinos, which would be extremely competitive. MGM has already invested in such a move with plans for a new casino in Bridgeport, Connecticut.
The Foxwoods Casino owners are now looking at other options available to them following this recent defeat.
Casinos in Connecticut
The biggest casinos in the state are the Mohegan Sun, operated by the Mohegan Tribe, and the Foxwoods Casino, operated by the Mashantucket Pequot Tribe. In fact, they are two of the biggest casinos anywhere in the world. The proposed East Windsor casino was to be operated by both tribes.
The slots industry is a very lucrative source of revenue for the state, which levies a 25% tax on all revenues. The two Native American casinos have exclusive rights on slot machines in the state. The last annual revenue figures showed that $13.2bn (£10.1bn) was wagered on slots, which have been legal in the state since 1993.
The proposed MGM casino in Bridgeport had looked dead in the water. It would have been located near Long Island Sound, but it was not debated during any of the state Senate meetings in 2018, although the Connecticut House narrowly passed legislation.
MGM will try again in 2019 to see if they can make any headway on the issue. The company had been planning a $600m (£461m) casino that would create an estimated 7,000 jobs in the region.
This proposed casino would have 2,000 slot machines, a 300-room hotel, 160 table games, retail stores, restaurants, and a theater that would seat 700 people. MGM believes that the casino would be up and running inside of 30 months after the development process starts. The company has spent almost $4m (£3m) on its lobbying efforts.