MGM Resorts stuns Connecticut with unsolicited $675 Million Bridgeport Casino Bid
22 Sep 2017
Global casino firm, MGM Resorts, caused controversy on Monday by submitting a $675m bid to build a casino in Bridgeport, Connecticut. This is the company that already has some big plans in the pipeline, such as an MGM Japan complex. They are also focusing on their home market.
The unsolicited proposal, envisioned the building of a 300 room hotel with an estimated 100k square foot casino that would also encompass roughly 30k square foot of retail space. The resort that would open in 2021, would offer 2,000 slot machines and 160 games to gamers.
A Chance for Connecticut
The proposal comes at a time of financial strain for Connecticut due to a budget impasse, and the loss of large pharmaceutical firm Alexion and General Electric, Aetna. Further tempting governors, MGM claimed that the casino would create more than 2,000 permanent jobs and a tax revenue stream of $316m per year.
Commenting on the proposal, Uri Clinton, senior vice president and legal counsel for MGM Resorts International said: “The easy analysis is Bridgeport has 7.3% unemployment.”
The proposal submitted by MGM has caused controversy owing to a dispute between MGM and Connecticut last month. The creation of a “satellite casino” was authorised to be built within the northern border of Connecticut, positioned mere miles away from the site where MGM is building its new resort in Springfield, Massachusetts
MGM went on to attempt to block the satellite casino build however, their case was dismissed by a federal appeals court. MGM stated that Connecticut had violated the Equal Protection and Commerce clauses of the US Constitution as well as their own state constitution due to a lack of competition on private, non-tribal land.
Only last year, MGM published the results of a commissioned study that revealed that if tribes built a casino in Bridgeport, it would generate more jobs and revenue. The study also conveniently demonstrated that the proposed site was as far away as possible from the MGM Springfield whilst remaining in Connecticut.
Conflicting with the Contract
A huge hurdle for MGM is that Connecticut prohibits commercial gambling and the state holds an exclusive contract with the Mohegan and Mashantucket Pequot tribes. The current contract allows the tribes to hold a monopoly on casino operations in exchange for both tribes sharing a quarter of their slot revenues with the state - the deal is estimated to be $250k per annum.
Both tribes have already united against MGM at the Massachusetts border and have expressed their opposition against the new proposal. Andrew Doba, a spokesperson for the tribes said that the proposal would violate the agreement between the state and the tribes:
“Simply put, authorisation of this facility would violate the existing compacts between the two tribes and the state which would immediately end the slot payments that currently sends [Connecticut] hundreds of millions a year in much-needed revenue.”
Competition in Connecticut
Connecticut are yet to make a formal decision however, it seems unlikely that MGM will be able to progress with their vision. On Monday, Connecticut Governor Dannel Malloy stated: “We will review the proposal when our office receives it however, it is important to note that gaming is not...authorised in Bridgeport under current law.”
MGM suggested a “two-step policy” that would only grant a license once the facility had been constructed. The policy suggested that the tribes would pay slot revenues during the construction of the casino after which MGM Bridgeport would contribute to state income.
Some lawmakers, union workers and Mayor Joseph Ganim all praised MGM’s pledge to create new jobs however, Governor Dannel Malloy is bound by his commitment to the state’s tribal operators who have recently received approval for a new East Windsor venture that will be owned and co-managed by MMCT. The bitter rivalry between MGM and the tribes will only be elevated as MGM’s new Springfield casino competes with the tribal casino in North Connecticut.
Today, additional comment was offered by Connecticut state after Governor Dannel Malloy told CT post that he “can’t imagine any scenario” where an agreement between Connecticut state, MGM and both tribal parties could be reached.