Casino workers would pay more in state licensing fees than casino developer

If legislation to construct a third casino in East Windsor passes, a blackjack dealer will have to pay more to the state for a gaming license than the developers of the estimated $300 million resort.

The Mashantucket Pequot and Mohegan tribes formed a joint venture, MMCT, to open another casino in Connecticut. MMCT finally chose the town of East Windsor on the site of the former Showcase Cinemas theater complex.

Workers on the casino floor or in a gaming-related position would have to pay a $40 license fee every year to the Department of Consumer Protection. The casino developers will pay the state nothing under the current proposal.

Neighboring states, like Massachusetts, have required casino companies to pay a one-time license fee before starting construction and that fee can be significant. MGM Resorts paid $85 million to the state of Massachusetts in order to start construction on the Springfield resort.

Currently, Senate Bill 957 does not require a license fee even though the casino would be built on private land outside of any tribal lands.

The proposal does require vendors to pay for a license. Businesses that provide over $25,000 per year in non-gaming services to the casino must get a $250 license and renew that license yearly. Companies that provide gaming services, such as equipment and equipment maintenance, pay $500 per year.

Connecticut is one of the most licentious states in the nation, requiring licenses for 241 different professions ranging from upholstery to cosmetology. Some of the state’s occupational licenses are unique to Connecticut alone.

But it appears this is one time when the state isn’t eager to impose a licensing fee. That may be due to the causes underlying the hard push for gaming expansion.

State tax revenue from the Foxwoods and Mohegan Sun casinos has declined from $359 million to $267 million between 2010 and 2015. Many lawmakers and those in the public believe building the third casino will bring added jobs and revenue to the state during a time of low revenue, slow job growth and high deficits.

Massachusetts has started building their own gaming centers, most notably in Springfield, to compete with Connecticut. It is estimated that MGM’s casino in Springfield will lower Connecticut’s casino tax revenue by another $68 million.

Opponents of the East Windsor casino, including MGM, argue the contract should be open to bidding from other developers so the state could reach a more profitable deal and collect higher percentages of gaming revenue.

Under the 1994 compact between the tribes and Gov. Lowell Weicker, the state of Connecticut is only entitled to 25 percent of the tribes’ slot machine revenue with a minimum payment of $80 million per year from each casino.

But allowing other companies to bid for a new casino could leave lawmakers between a rock and a hard place.

The Mashantucket Pequot and Mohegan tribes are not obligated to pay the 25 percent slot machine revenue if the state permits any other company to open a casino in the state.

The tribes have reportedly offered the state a $25 million advance on its slot revenue and offered to install slot machines in off-track betting parlors if the bill is passed. The advance would not be a license fee but rather a loan on future revenue.


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