Battle rages over non-tribal “commercial enterprise”

The US Department of the Interior has filed a motion to dismiss a lawsuit filed in August by MGM Resorts International in connection with a joint casino development project in Connecticut, funded by the Mohegan and Mashantucket Pequot tribal nations. The two tribal nations respectively operate Connecticut’s Mohegan Sun and Foxwoods casinos.

MGM’s lawsuit asserted that the Bureau of Indian Affairs, an agency within the Interior Department, broke federal law by issuing the approval to a joint commercial — and specifically non-tribal — entity called MMCT Venture, LLC (MMCT).

The two tribal nations respectively operate Connecticut’s Mohegan Sun and Foxwoods casinos

The department and agency administer tribal gaming as authorized under the US’s 1988 Indian Gaming Regulatory Act (IGRA), which paved the way for the hundreds of tribal casinos now operating in a majority of US states.

In its 33-page response, the Department of the Interior wrote that its approval of the East Windsor, CT project was “entirely consistent” with IGRA’s rules. The department also argued that MGM Resorts’ claim that the department violated federal procedural rules found in the Administrative Procedure Act (APA) was also invalid.

Tribes sued Interior first

The MGM lawsuit represents the latest step in a casino development battle that dates back to 2017. At that time, the Mohegan and Mashantucket Pequot tribal nations each created a formal Memo of Understanding with the State of Connecticut regarding the East Windsor casino project.

However, the proposed East Windsor location was neither reservation land nor eligible to be designated as off-tribal “land in trust”. The problem was complicated further because both of Connecticut’s major tribal nations sought to participate.

The tribes sought Interior Department approval for the MOUs under IGRA as individual tribal entities. Interior declined at that time because it was a joint commercial project, not a tribal gaming enterprise.

On June 1, 2018, Interior sought to ease the issue by publishing a notice in the US Federal Register

In response, the two tribes and the State of Connecticut sued the feds. On June 1, 2018, Interior sought to ease the issue by publishing a notice in the US Federal Register. The department noted that no active rejection of the tribes’ resubmission of the MOUs had occurred within a 45-day window.

As a result, “the Amendment[s are] considered to have been approved, but only to the extent the Amendment[s are] consistent with IGRA.” Left unanswered, though, was the extent to which IGRA actually applied, if at all.

MGM lawsuit forces the issue

MGM Resorts’ lawsuit in August attacked Interior’s tacit approval of the two tribal nations’ back-channel deal with Connecticut’s legislature. Those actions included a pair of special laws, also approved by the tribes, affirming that the joint commercial MMCT venture would not void the existing tribe-state gambling compacts already in effect.

Now forced to defend its approval, Interior’s attorneys have attempted a narrow legal explanation as to why: “[T]he Amendments merely confirm that the operation of a state-sanctioned commercial gaming facility by a state-charted tribal joint venture does not violate the exclusivity provisions of the Tribes’ respective MOUs with the State.”

Interior’s dismissal motion also argues that the Connecticut law “may have conditioned its final authorization of the commercial facility on Interior’s approval of the Amendments, but that does not transform Interior’s approval of the Amendments into a direct authorization of the commercial facility under IGRA.”

Attorneys for Interior and MGM have already filed jointly for a time extension before the next round of legal briefs.