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HARTFORD — The Schaghticoke Indian tribe — with financial help from Las Vegas mogul MGM Resorts — is challenging the state’s plan to build a new casino in the Hartford region.

Schaghticoke Chief Richard Velky on Monday filed suit in U.S. District Court in Hartford to overturn a state law passed last year allowing the Mashantucket Pequot and Mohegan Indian tribes to jointly build a third casino off of their federally recognized reservations.

Both tribes agreed to build the small-scale gaming facility along Interstate 91 to buffer competition from a mega casino MGM is building in nearby Springfield, Mass. Sites now under discussion are in Windsor Locks, East Hartford and Hartford.

Velky said the law authorizing the joint casino is unconstitutional because it excluded other parties, such as his Kent-based tribe, from bidding for the valuable facility. MGM last year filed a similar lawsuit against the state, indicating the company is interested in also bidding.

“Without any competitive bidding or gaming study, Connecticut shut out the Schaghticoke Tribal Nation and awarded to one pair of native American tribes the exclusive ability to develop a highly valuable commercial enterprise,” Velky said.

Alan Feldman, an MGM vice president, said the casino giant is helping finance the Schaghticoke’s lawsuit because they have similar interests. He declined to say how much MGM is contributing to the suit.

“We have a mutual interest,” Feldman said. “We both feel the [law] is unconstitutional.”

Andrew Doba, a spokesman for MMCT Venture, the company formed by the Mohegan and Pequot tribes to build the casino, said MGM funding of the Schaghticoke lawsuit raises concerns.

“After weeks of not returning phone calls from reporters, Chief Velky finally revealed that his operation is being bankrolled by MGM,” Doba said. “This startling revelation should raise a red flag for anyone who is concerned about MGM's plan to steal jobs from Connecticut residents.”

Rejected

Velky said the tribe in January submitted an application to the state for permission to bid on a casino under the law passed by the General Assembly, but the petition was rejected.

“The state has a long history of discriminating against the Schaghticoke Tribal Nation,” Velky said.

“Recently, the state fought our federal recognition, supposedly because they didn’t want another casino in Connecticut,” Velky said. “Now Connecticut wants to open a new casino, but only if the Schaghticoke Tribal Nation doesn’t get an opportunity to submit a proposal to operate it. The Schaghticoke Tribal Nation seeks equal treatment.”

The Schaghticokes have been repeatedly denied federal recognition, which carries permission to build a casino on reservation land. The tribe owns a state recognized 400-acre reservation in rural Kent.

Neither Velky nor Feldman would say how much MGM is contributing to the Schaghticoke lawsuit, which is expected to be costly. “They are paying some and we are paying some,” Velky said.

“We were approached by MGM about the right to operate a casino,” Velky added. “We asked MGM to help us financially.”

Both Feldman and Velky said no deals have been struck with the Schaghticokes over operating or partnering in a casino if their lawsuits prevail and the state is forced to open the process to bidders.

“It’s premature to discuss that today,” Velky noted.

Feldman also denied that MGM’s decision to finance the Schaghticoke legal action is designed to delay the Connecticut casino and allow MGM’s Springfield resort to open before the state is able to siphon customers.

MGM has said the new casino should be built in southwestern Connecticut because the location would earn the operator and the state more revenue. Although Bridgeport is considered a prime location, Feldman said there have been no discussions with city officials.

Devon Puglia, a spokesman for Gov. Dannel P. Malloy, and Jacyln Falkowski, a spokeswoman for Attorney General George Jepsen, declined comment on the lawsuit.

Open process

Velky acknowledged the lawsuit seeks to force an open bidding process in which anyone could seek the right to build the planned casino.

“Once they moved the casino off the reservation, it became a commercial operation that we have a right to apply for,” Velky said.

The Pequots and Mohegans could withhold the 25 percent of their slot revenue collected by the state if a casino is built outside of a federally recognized reservation. But by agreeing to jointly build the casino, and allowing it to be placed on non-reservation land, both tribes avoided the conflict and pledged to continue paying the state slot money.

The Pequots and Mohegans have watched gaming revenue drop dramatically as competition in New York State, Massachusetts and Rhode Island lured gamblers away.

The tribes fear the MGM Springfield casino will further erode revenue and cost Connecticut thousands of jobs.