MGM Springfield could be 'devastating blow' to Conn. gaming, tribal leaders say at hearing

MGM Resorts International and Connecticut's two tribal casino operators delivered opposing arguments before Connecticut lawmakers Thursday, as the legislature's Commerce Committee considers whether to require additional study before allowing construction of the state's third casino.

MMCT, the joint Mohegan-Mashantucket Pequot company authorized by Connecticut to seek a new casino site near the I-91 corridor, is still hoping to open before MGM Springfield, and has come out against additional studies which could delay its development efforts.

"The Massachusetts casino when it opens its doors will strike a devastating blow to our state," said Mashantucket Pequot Chairman Rodney Butler, adding that the tribes have already funded a study showing more than 9,000 Connecticut jobs could be lost due to increased casino competition.

MGM Resorts International Executive Vice President Alan Feldman said the state should not rush into a new casino deal, which he described as being driven by MMCT rather than state regulators. His company has funded a competing study by Oxford Economics whose preliminary findings advocate for a new casino in Southwestern Connecticut rather than one near the Massachusetts border.

"This committee has the opportunity to set things right and do the type of proper independent analysis that should have been done last year," Feldman said in written testimony. "Good public policy is rooted in doing the research.  Don't just trust special interests - but verify."

MGM legal counsel Uri Clinton said that state law should lead the legislature to do a comprehensive independent study before approving new casino development, especially given the contradictory studies put forwarded by MGM and MMCT.

Sen. Joan Hartley also took note of the muddled scholarly evidence at the hearing.

"We're in the position now where we have dueling studies," Hartley said. "Just this week, very curiously, dropped on my desk was another study."

MMCT, the Mohegan-Mashantucket Pequot company that was authorized by the state to seek a casino site last June, is in the process of choosing a prospective casino site and has narrowed the field to three municipalities. Last month Rep. Chris Perone proposed that the state take a step back and conduct its own study of the issue.

"Let's make decisions based on the analysis of our overall gaming climate in the state of Connecticut," Perone said when he introduced the bill last month, according to the Hartford Courant. "That's what this is really about."

The proposal drew pushback from MMCT arguing that the issue had been studied enough. The company cited studies it commissioned by political scientist Clyde Barrow which found that competition from MGM Springfield and other new casinos could cost Connecticut thousands of jobs, and that a $300 million casino in north-central Connecticut could recoup much of those losses.

In a subsequent op/ed for the Hartford Courant, Perone said he was sticking with his call for more analysis but did not believe it would delay the tribes' casino plans.

Another act of the legislature is still required to build the casino.

Feldman's appearance was the company's first public address in Connecticut since a pair of corporate moves that may complicate the state's casino development process.

MGM funded its own study that was released a week ago and found that Southwestern Connecticut is a better location for a new casino than the I-91 corridor near Springfield. And the company, which is already suing to overturn the state's gaming act, is helping to fund a new lawsuit by the Schaghticoke Tribal Nation alleging that Connecticut's gaming law is discriminatory.

Schaghticoke Chief Richard Velky also testified, arguing that the gaming law is unconstitutional. He also shed some light on his tribe's relationship with MGM, saying that he asked the company for help during discussions over the gaming act last year, and that MGM has helped pay legal bills tied to the new lawsuit.

"I reached out to MGM and asked them to help the Schaghticoke nation financially because this was we an interest that we had," Velky said.

Butler, in an interview outside the hearing room, said that MMCT still expects to beat MGM Springfield to its 2018 opening date, despite a site selection process that has extended beyond an original December deadline. Even if a new Connecticut casino opens after MGM Springfield, Butler said he was optimistic the company's detailed market knowledge of New England gamblers would give it a competitive advantage.

Barrow, who conducted the studies funded by the tribes, said that the Oxford Economics study funded by MGM is speculative, uses imprecise data, is not transparent in its methodology and unfairly compares a proposed $1 billion casino in Southwestern Connecticut to a smaller casino closer to Massachusetts. Barrow also cast doubt on the motives of the study, intimating it was funded to advance MGM's corporate interests.

"It is no accident that this sleight of hand is buried deep in the middle of paragraphs on p. 25 and p. 27 of their report as they know full well that most readers will never read beyond the executive summary," Barrow said in written testimony. "The Oxford Economic report is a Trojan Horse."

Fred Carstensen, a University of Connecticut business professor whose Connecticut Center for Economic Analysis has been contracted to conduct yet another study of casino impacts by MGM, took an opposing view. He said that Barrow's analysis was far too rosy on the prospects for a small casino on the I-91 corridor, and had not taken into account the revenues that the casino would cannibalize from other businesses in the state.

He described the push to quickly build a new casino as a "panic," and cited lower-than-expected revenues at Massachusetts' Plainridge Park casino to argue  that MMCT's plan could fail and lead to a "zombie" gaming site.

"I see no coherent evidence that it will work," Carstensen said. "It's very hard for me to envision why people would stop in Windsor Locks near the airport instead of driving another 20 minutes to a facility three or four times larger."

A number of casino employees and local business owners also testified on behalf of MMCT, describing the casinos as essential to their livelihoods.

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