MGM withdraws Connecticut tribes-related lawsuit against DOI

MGM withdraws Connecticut tribes-related lawsuit against DOI

American hospitality & entertainment giant MGM Resorts International has confirmed that it has withdrawn its lawsuit against the U.S. Department of the Interior (DOI) that was filed in 2017 after Connecticut allowed its two native tribes to jointly construct a casino in East Windsor. 

MGM said it decided to roll back its legal action as the Connecticut no longer allows the Mashantucket Pequot and Mohegan tribes to federally build a new land-based casino off their sovereign land. Previously, the Constitution State had allowed the two states to build a Class III gaming property in East Windsor. The updated terms of the agreement specifically prohibit a Class III casino from being built and operated in East Windsor for at least next 10 years.

The tribal casino, which would have cost nearly $300 million to be built, was tailored in order to prevent the flow of gaming dollars from Connecticut to the neighboring state of Massachusetts. MGM owns and operates a $960 million integrated casino resort in Springfield, Ma. 

The DOI also signed off on the revised gaming compacts hit between the state and the two tribes, but MGM argued that the tribes could not be allowed to build the gaming property off their reservation lands. MGM stressed that Connecticut governor had no legal authority to allow the native tribes to operate a commercial gaming property on non-Native American land and that the federal agency also erred in approving the new terms.

The lawsuit filed in 2017 eventually forced Connecticut to revise the terms of the gaming compacts, putting an end to the dispute. MGM said it dismissed its lawsuit against DOI “without prejudice.”

It may be noted here that the controversial compacts were signed off by former Connecticut Gov. Dannel Malloy (D); while the new compacts have been signed off by the current Gov. Ned Lamont (D) who, unlike his predecessor, took a really hard stance against the East Windsor casino project after he become the state’s governor in 2019. Gov. Lamont, instead, favored allowing the tribes to operate virtual sportsbooks and iGaming platforms.

Speaking his mind, he said, “This is something that’s going on all around us, and I think Connecticut should participate. If we found out anything in the course of this horrible COVID cycle, more and more of the world is going virtual and online.”

Under the new gaming compacts, profit generated by sportsbetting operations will be taxed at a rate of 13.75 per cent, while the state’s cut of the iGaming proceeds will be 18 per cent for the first five years, and 20 per cent subsequently.