Casino developer MGM Resorts International has filed a lawsuit against three top Connecticut officials, including Democratic Governor Dannel Malloy.
The lawsuit claims that a law signed by the governor -- which could lead to a third tribal casino in the state -- is unconstitutional, because it gives two Connecticut tribes preferential treatment. Defendants in the complaint, besides Malloy, are Secretary of the State Denise Merrill and Consumer Protection Commissioner Jonathan Harris.
MGM plans to open its own $800 million facility in nearby Springfield, Massachusetts. In the lawsuit, the company expresses interest in being able to develop a casino facility in Connecticut, too -- but the new law prevents that.
From the complaint:
To the exclusion of all other tribes, races, and entities, both in-state and out-of-state, the Act authorizes the two federally-recognized Indian tribes in Connecticut -- and only those two tribes (the "Preferred Tribes") -- to form a special business entity to negotiate with Connecticut municipalities regarding establishment of a commercial casino gaming facility. The Act further authorizes the Preferred Tribes to enter into a casino development agreement with a municipality and to submit such an agreement to the Connecticut legislature for approval. In essence, the Act creates an exclusive, no-bid process for the Preferred Tribes to present to the Connecticut legislature a proposal for development of an off-reservation commercial casino in Connecticut.
The complaint goes on to say that the new Connecticut law is "fundamentally inconsistent with federal law governing Indian gaming."
State Senate Majority Leader Bob Duff said the lawsuit "smacks of desperation." The Norwalk Democrat, who was a chief proponent of the legislation, said MGM's move also shows it has no business plan to compete with the Foxwoods and Mohegan Sun casinos.
A report at MassLive.com cited Kathryn Rand, co-director of the Institute for the Study of Tribal Gaming Law and Policy at the University of North Dakota School of Law. From the story:
The [Connecticut] law is specific in who is eligible to build the new casino: a business entity "owned exclusively by both the Mashantucket Pequot Tribe and the Mohegan Tribe of Indians of Connecticut."
MGM's racial discrimination argument could prove difficult, Rand said. While race-based classifications face strict scrutiny from the courts, there is case law treating federally recognized tribes as political, not racial, entities, making it easier for laws targeting tribes to pass constitutional muster.
"That is, I think, well settled in federal law – that a tribe's status as a federally recognized tribe is a political status and not a race based classification," Rand said. "I think that's going to be an uphill argument."
In its filing, MGM argued that Connecticut's law would fail to meet even the looser "rational basis" standard for constitutionality, and that states do not have the same right to make laws targeting tribes as the federal government.
The Attorney General warned earlier this year that legislation giving tribes exclusive rights to a new casino could prompt legal challenges. He told legislators in a six-page memo that they should carefully weigh the potential benefits of the new law against the risks it brings.
This report includes information from The Associated Press.