MGM challenges Connecticut law clearing way for third Indian casino

The suit, filed in federal court in Hartford, comes as MGM is in the process of building one of the first casinos to open in neighboring Massachusetts, in the city of Springfield not far from the Connecticut border.

Connecticut's federally recognized Mashantucket Pequot and Mohegan tribes respectively operate the state's Foxwoods and Mohegan Sun casinos on their reservations, which is allowed under a 1998 federal law that cleared the way for tribes to operate gambling establishments on their native lands.

Las Vegas-based MGM said its suit does not attempt to challenge the U.S. Indian Gaming Regulatory Act but rather claims that a Connecticut law that would allow the two tribes to bid for a commercial casino off reservation land, but blocks non-Native American entities from bidding, violates the U.S. Constitution.

"There is no constitutionally legitimate basis for the (state) act's discrimination in favor of the preferred tribes and against all other potential bidders," the company, which generated some $10.1 billion in revenue last year, said in a court filing.

Supporters of the law had expressed concern that the new $800 million MGM casino in Springfield, one of three casino resorts featuring table games allowed in Massachusetts by a 2011 law, would siphon off customers.

"While we will be reviewing the lawsuit, we believe in protecting Connecticut jobs," said David Bednarz, a spokesman for Connecticut Governor Dannel Malloy, who signed the law in June.

The Connecticut law would block MGM from pursuing what it called a "two-stop strategy," common in the industry to attract more gamblers to the area, in which a developer opens two casinos relatively near each other. The lawsuit noted that the Mohegan tribe attempted a similar maneuver last year when it bid for a Massachusetts casino license.

Wynn Resorts Ltd won the rights to build a $1.75 billion casino outside Boston.

Tribal officials also described MGM's suit as self-serving.

"This is about siphoning revenues from Connecticut to benefit a Las Vegas company while at the same time moving thousands of existing jobs from Connecticut to Massachusetts," said Mashantucket Chairman Rodney Butler and Mohegan Chairman Kevin Brown in a statement last month, after MGM threatened action.