Attorney General Warns Legislators That Tribes’ Casino is a Gamble

Tribes call on Attorney General who declared giving license to casino a gamble to provide possible avenues to subdue the risks.

The Attorney General of Connecticut, George Jepsen, told legislators recently that the joint proposal to develop Connecticut’s first casino off tribal lands of the Mohegan and Mashantucket Pequot tribes, raises serious legal dangers and is skeptic that it will work. The tribes counter argument is that if they are allowed to jointly build a casino in the I-91 corridor north of Hartford, they will be a formidable rival to the MGM land-based and online betting casino resort being developed over the state line in Springfield.

Tribes exclusive rights to a casino may cause legal dangers and uncertainties

Jepsen however cautioned that ‘granting the tribes exclusive rights to a casino or casinos off tribal lands could violate either the commerce or equal protection clauses of the U.S. Constitution’. For, if the legislative leaders grant the tribes exclusive rights, harm could come to the current profit-sharing agreement with the tribes and also the state could be putting itself at risk to be criticized for ‘illegal favoritism’.

Jepsen told the legislators that “In light of this uncertainty and the attendant risks, the legislature should carefully weigh the anticipated benefits of the proposed legislation against the risks it poses to the current arrangements”. The memo which turned out be 6 pages long, was also distributed to Gov. Dannel P. Malloy, during a meeting Wednesday afternoon with the main Democratic and Republican leaders of the House and Senate.

According to US gambling news, Jepsen wrote that the existence of a new casino, even if operated by a new business entity owned by the tribes, could disregard the state’s exclusive slots deal with the Pequots and Mohegans if the gaming compacts or memoranda of understanding are not changed.

Added complication for tribes request for legislation

Jepsen said his letter is “not intended to dissuade legislators from pursuing casino expansion, but to inform them of potential complications while the legislation still was being developed”. Jespen may have some clout in influencing the already complicated issue of the tribes’ desire to have legislators grant them a license.

He mentions the potential impact on the state’s existing tribal compacts, which allow slots at the Mohegan Sun and Foxwoods Resorts Casino in exchange for 25% of gross slot revenues. He also addresses the issue of what would happen if another tribe, other than these two, win federal recognition in Connecticut.

Jepsen also wrote that “Both of these issues pose significant uncertainties and potentially serious ramifications for the existing gaming relationships between the State and the Tribe. We are unable to predict with any certainty how a court would resolve such issues”.

Jespen wants to make sure legislators are covered

If the Senate allows for US gambling lawsto be passed, one could see the development of three casinos. However Senate President Martin M. Looney, D-New Haven, said he imagined that only one bill would be authorized, the one that would be situated in north of Hartford.

According to the legislature’s Office of Legislative Research, another problem, that of anti-trust, could arise. A possible third-party could accuse the legislators for passing a bill which would be illegally favoring the tribes.

Should the legislation go ahead Jespen advocated on inserting a clause in the casino bill which would stipulate that the law in its entirety would be made void if a court reckons that any part may be ‘void, unconstitutional or otherwise unenforceable’.

Tribe sees state as partners

The tribes issued a joint statement Wednesday which stated their desire to work together with the state as “We have been actively engaged for many weeks with the Attorney General and lawyers for legislative leadership, working to identify the best way to protect nearly 10,000 Connecticut jobs and hundreds of millions in tax revenue that will be lost when a new casino opens in Springfield in 2017”.

Jepsen said “It would be prudent, therefore, to condition the effectiveness of any legislation upon an agreement among the State and the Tribes that such legislation is not a violation of the existing MOUs,” The Pequots had decided to first open a casino with only table games according to the laws of the Indian Gaming Regulatory Act.

This meant that Federal government would have to recognize that the tribes can offer any gaming as allowed by the states in which their reservations are located. This was because of a law that permitted blackjack and other table games for charitable purposes that the Pequots have. So far 3 other tribes have been denied federal recognition and include the Eastern Pequot, Schaghticoke and Golden Hill Paugussett.