MGM Resorts Suing the Federal Government over Approval of Tribes’ Casino Plans

  • Lawsuit relates to the Mohegan and Pequot tribes receiving approval for a casino resort
  • Facility would be located 12 miles from the MGM Springfield in Massachusetts
  • MGM claims that the no-bid contract for the tribes' casino resort project breaks federal laws
  • This is a long-running battle after provisional plans were passed in March 2019
Close-up view of the MGM Casino and Hotel sign set against a deep blue summer sky.
MGM Resorts is suing the federal government over the approval of two tribes’ joint casino resort plans in East Windsor, Connecticut. [Image: Shutterstock]

Battle rages on

MGM Resorts has sued the federal government of the United States following its decision to approve the development of a casino in East Windsor, Connecticut.

This long-running battle has already seen MGM’s opponents in this case, the Mohegan and Pequot tribes, previously sue the federal government. 

federal laws were broken when an expansion agreement for the casino development was approved

Specifically, MGM Resorts has sued both the US Interior Department and the Bureau of Indian Affairs. The latter is in charge of implementing the federal laws outlined in the Indian Gaming Regulatory Act. 

MGM alleges that federal laws were broken when an expansion agreement for the casino development was approved by these federal authorities.

The lawsuit claims that the alterations made to the original agreement between the tribes and Connecticut “confer a statewide, perpetual competitive advantage” over the other gaming operators in the region. This is not legal, according to federal laws. 

Lawsuit arguments

The casino company has a strong case. Connecticut has been favoring the two tribes by not allowing any other party to develop a casino in the state. This agreement came into place in 1991. 

The state government gave this exclusivity to the tribes as it wanted to preserve the 25% cut received from the tribes’ slot machine revenues. Since the tribal casinos in Connecticut began operating, almost $8bn has been contributed to the state government.

As a result of this lawsuit, further lengthy delays are expected before any building work can commence. That is if the project will be allowed to begin at all. It will ultimately depend on what the courts have to say on the issue. 

Background to the fight

MGM Resorts and the Pequots did partner together in 2006 to operate the Foxwoods Resort in Connecticut. However, this agreement ended in 2013 as both parties were trying to expand into the Massachusetts market.

state government wanted to continue receiving revenues from the tribes’ slot machines revenues

MGM successfully won the license to develop a casino in Springfield, which is just 80 miles from the Foxwoods Resort. The Pequot tribe failed in their bid to obtain the license for the Boston-based casino, which is now the Encore Boston.

As the state government wanted to continue receiving revenues from the tribes’ slot machines revenues, it gave them a no-bid contract to develop a commercial casino on tribal land in East Windsor. This site is located only 12 miles from the MGM Springfield. 

The tribes also had the right to develop a casino resort in Bridgeport. They were also given the right to operate sportsbooks and online gambling apps once the state legislature made these activities legal. 

Stages of the battle

Naturally, MGM was not happy at the prospect of having a major casino located in such close proximity to the MGM Springfield. The company also wanted to expand into Connecticut.

Therefore, they sued the state, claiming that the original state-tribal compact did not allow for the granting of any no-bid contracts. They also said not allowing fair competition in the bidding for commercial contracts was in violation of the US Constitution. Both the state court and federal appeals court rejected this suit.

The U.S. Department of the Interior was stalling on approving the tribe’s new agreement with the Connecticut state government. This led to the tribe suing the federal government. They were claiming that the secretary of the U.S. Department of the Interior at the time, Ryan Zinke, was being lobbied by MGM Resorts to stall this deal.

Following the resignation of Zinke in December 2018, the deal was approved by the department.

Provisional plans

The new casino in East Windsor is to be called the Tribal Winds Resort Casino.

The casino floor would take up more than 100,000 square feet. It would contain 1,800 slot machines, 50 table games and ten poker tables. It would cost about $400m to develop and the process would take at least two years.

Around 2,000 jobs would be created during development, with a similar number of permanent jobs being created upon opening. 

The current Connecticut Governor Ned Lamont is in favor of this casino resort. Speaking about the state’s relationship with the tribes, he said: “We’ve had a very strong bond and contract going back well over a generation. I’m going to do everything I can to make sure that the contract stays intact. We are working together going forward.”

Leave a Reply

Your email address will not be published. Required fields are marked *