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Connecticut Tribes-Casino

Kevin Brown, left, Chairman of the Mohegan Tribal Council and Rodney Butler, right, chairman of the Mashantucket Pequot Tribal Council, host an historic signing ceremony, Thursday, Sept. 10, 2015, at the state Capitol in Hartford, Conn., formalizing their new casino venture. (Lauren Schneiderman/Hartford Courant via AP)

The chips appear to be down in the state of Connecticut's ongoing court battle with MGM Resorts International over its plans to build a third casino in the state, with both sides disputing whether the state's gaming act illegally favors its current tribal casino operators.

In a legal filing on Wednesday, the state stuck to its argument that because its June gaming act requires another legislative vote to authorize construction of a casino, its special attention given to the Mohegan and Mashantucket Pequot Tribes -- which included authorizing those tribes to form a joint company to explore casino development -- did not give MGM standing to sue.

"[The gaming act] could not be clearer; it does not authorize anyone to operate a commercial casino in Connecticut. Nor does it remotely guarantee that anyone will ever be able to operate a commercial casino in Connecticut," the filing said "That should be fatal to MGM's attempt to establish standing."

The filing was a response to MGM's arguments earlier this month that a federal judge in Connecticut should not dismiss the suit. In that filing, MGM said that that the process reserved for the tribes by the gaming act -- including placing the tribal RFP on the state Department of Consumer Protection's web site -- placed the tribes at a clear advantage.

"Even if MGM were able to compete for a casino-development project, it would be doing so 'at a competitive disadvantage' by virtue of the legislative endorsement and assistance from state agencies only the Preferred Tribes enjoy under the Act," MGM's filing said.

The construction of a third Connecticut casino is of keen interest both in Connecticut and across the Massachusetts border, with some supporters of the Connecticut casino measure framing the act as a way to protect state gaming revenues and jobs from Massachusetts competition. A study funded by both tribes suggested out-of-state casino competition could cost Connecticut 9,300 jobs. And, according to The Day, the tribes have said the casino could open before MGM Springfield, which is now targeting a September 2018 opening.

MGM's lawsuit alleges that the state's gaming act, signed by Gov. Dannel Malloy in June, violates the Equal Protection Clause of the 14th Amendment. It also alleges the act violates the Constitution's Commerce Clause by restricting the RFP process to a joint company formed by the Mohegan and Mashantucket Pequot tribes. The tribal company, called MMCT, released an RFP and originally target Dec. 15 for a site selection, but has since delayed that decision to the new year.

Connecticut's gaming act established a process for MMCT to issue an RFP and seek a potential casino site in a Connecticut municipality. MGM cited media reports and statements by tribal and state officials to argue that the law was expressly designed to favor the tribal company.

"The new law that was enacted is about protecting and expanding jobs right here in Connecticut. I believe we can better achieve that goal by working with the Mohegan and Pequot Tribes who have agreed to partner with the state," MGM quotes Connecticut Rep. Stephen Dargan as saying.

But Connecticut's latest filing argues that a plain reading of the law only establishes additional requirements for the tribal company and does not prevent MGM from seeking proposals for its own Connecticut casino. The filing cites a number of legal precedents to argue that MGM has not suffered any legally actionable injury by the passage of the gaming act, and so does not have standing to sue.

"Ultimately, Connecticut law did not, and does not, prevent MGM from taking steps toward developing a Connecticut commercial casino," the filing said.

The legal distinction between a law that authorizes the tribes to begin seeking a casino site and one that prohibits other companies from doing so was not always part of the law's DNA.

An earlier draft of the law explicitly awarded three casino licenses to the tribes, prompting Connecticut officials to the possibility of legal complications prior to the bill's passage. The MGM suit cites an April 15 letter by Connecticut Attorney General George Jepsen which warned that an initial draft of the law could lead to court challenges, though Jepsen later indicated the amended version had addressed some of his concerns. An Office of Legislative Review analysis of the early draft also said the act could appear to violate the state constitution and the state's antitrust act.

The version that crossed Gov. Dannel Malloy's desk fixed those problems, the state argues.