Mashantucket Go National, Global: Expansion Raises Ethical Questions

MASHANTUCKET, Conn. – The world’s biggest tribal casino operation is about to get bigger.

The Mashantucket Pequot Tribal Nation, owner of Foxwoods Casino, announced April 25 that it has entered into a “multifaceted strategic alliance” with MGM Mirage, one of the biggest commercial hotel and casino companies in the world.

The partnership will develop additional gaming and non-gaming businesses on the Mashantucket reservation in southeastern Connecticut, across the nation, in the U.S. Virgin Islands and abroad, according to a news release issued that day.

MPTN also has plans for casinos and resorts in California, Kansas, Mississippi, Pennsylvania and the Virgin Islands.

The tribe and MGM Mirage said they will collaborate on a $700 million hotel/casino resort already under construction at Foxwoods on the tribe’s reservation.

The new facility will provide fine dining, a nightclub, entertainment, a spa and recreational and retail amenities. It is scheduled to open in the spring of 2008.

The new resort hasn’t been named yet, said MPTN spokesman Brian MacDonald, but it will use the famous MGM Grand brand under long-term license arrangements.

MGM Mirage will provide the MPTN with a loan of up to $200 million to finance the tribe’s investment in joint projects.

And what does MGM Mirage get from the deal?

“We get a licensing fee for the tribe’s use of the MGM Grand brand and we’ll also receive a consulting fee for the work on their announced project at Foxwoods. That’s what’s in it for us monetarily, but more importantly we’re looking toward the future,” said MGM Grand spokesman Gordon Absher, vice president of public relations.

“This is the first step in a potential long-term business partnership where we might as two gaming companies find opportunities that would benefit both. What shape those projects might take has not been specified yet,” Absher said.

It is quite possible for the new partners to work together on a number of projects the MPTN already has in the works, Absher said.

“The nature of the joint venture … is unclear from the tribe’s recent public announcement,” Connecticut Attorney General Richard Blumenthal wrote to the tribe immediately after the news of the alliance was announced. He asked for copies of the agreements between the tribe and MGM Mirage.

Blumenthal said that the tribal/state gaming compact, the federal Indian Gaming Regulatory Act and the National Indian Gaming Commission “allow and require state oversight of any proposal for the expansion of gaming on the reservation to determine if any planned gaming activity comports with the requirements of the law.”

George Henningsen, chairman of the MPTN Tribal Gaming Commission, wrote a letter the next day declining to provide the attorney general with documents “that are still in the proposal stage.” Henningsen agreed that the final agreement would be subject to “the same state oversight” that “is currently in place for our existing facility; no more, no less.”

MacDonald said the BIA has to approve the final agreement. Under BIA and IGRA rules, a tribe has fairly broad authority to expand gaming on its reservation.

“It’s my understanding that it’s a federal question, not a state question. We had broken ground on the project in November and nobody had a problem with it then, and there’s no reason to have a problem with it now. It’s the same project. We’ll consult with MGM and it will carry a different name, but the ownership and operation remains with the tribe,” MacDonald said.

Beyond Connecticut, the MPTN is pursuing five gaming projects:

* In Philadelphia, the tribe is competing with nontribal gaming operators in a contest for one of two casino licenses. They plan to build a $400 million casino on a riverfront site.

* In Kansas, the tribe is partnering with the Iowa Tribe of Kansas and Nebraska on a state-approved $270 million casino project.

* In the Virgin Islands, the tribe is planning a broad resort vacation destination with gaming, hotels, a golf course, a marina and other recreational facilities on a 600-acre beachfront property. The tribe owns a major share of the development company that owns the property.

“That process began last year and we’re partway through the approval process,” MacDonald said.

* In California, the MPTN is working with another tribe to develop a casino/hotel resort, but MacDonald declined to name the tribe or discuss the details.

* In Biloxi, Miss., Foxwoods Development Co., the tribe’s development arm, has filed notice of intent with the Mississippi Gaming Commission to build a $400 million casino resort on 15 acres. Foxwoods Resort Casino at Broadwater Beach will be part of an already approved development on 260-plus acres of waterfront property that will include a mall, condominiums, a golf course and a marina.

The off-reservation venues will be commercial gaming venues subject to all local and federal regulations and taxes, MacDonald said.

“And that’s an important

distinction to make. We’re not going into any place claiming ancestral rights or putting land into trust,” McDonald said.

But just as “reservation shopping” is a hot-button issue, the issue of expansion into other tribes’ territories is raising some moral questions.

Tara Ryan, Chickasaw/ Choctaw, is a registered member of the Chickasaw Nation. A former employee at Mashantucket Pequot Museum and Research Center, she owns and operates Native American Arts and Entertainment Co.

“The intent was never for any one nation to go outside of its own current boundaries – whatever they are – of our ancestral lands onto anybody else’s ancestral lands. The whole issue of sovereignty and the spirit of the law were to promote sovereignty and self-sufficiency. And the only reason they have the money to do this is because they are an Indian sovereign nation,” Ryan said.

Ryan said she has nothing against Indian casinos per se, because casino money has provided tribes with the opportunities for education, cultural activities and economic development that helps take care of the nations and their people. But, she said, the kind of expansion planned is somehow “un-Indian.”

“It just seems so blatant to say we’re going to go into this territory and that territory. It would be all right if it wasn’t a Native business, if you were Harrah’s or MGM,” Ryan said.

Ryan also noted the disparity in wealth among the tribes.

“There’s all the bigger tribes out West who have nothing, and this is just a tiny tribe. They’re not struggling to feed their people; they’re not struggling with health issues or to take care of their elders. There’s no need for them to go outside of their own area. How would they like it if the Choctaws came up here and opened a casino?” Ryan said.

The Mississippi Band of Choctaws owns and operates Mississippi’s two tribal casinos on the band’s historic reservation. The casinos are not subject to taxes. A tribal spokesman said the tribe has no objection to the MPTN’s plan because it is commercial.

“The Mashantucket Pequot proposed investment in Biloxi is exactly the same as an investment by MGM, Harrah’s or any other private investment group – it is not an expansion of Indian gaming in Mississippi. The Mississippi Band of Choctaw Indians is the only federally recognized Indian tribe in the state of Mississippi,” Chassidy Wilson said.

Nevertheless, Ryan said the issue requires a wider discussion among the nation.

“I talked to a lot of different people [about this] and everyone was equally stunned and wondering what could or should be done, if anything. The problem is they’re not comfortable speaking on the record. But this whole issue should be a cultural discussion among all the leaders of all the nations, not just one tribe deciding that it’s an OK thing to do,” Ryan said.