Jul 29, 2014
07:10 AMConnecticut Today
Connecticut Fears Change to Native American Tribes Law; 3 New Casinos?
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On Monday, Gov. Dannel P. Malloy released a statement in response to an announcement from the U.S. Department of the Interior’s Bureau of Indian Affairs (BIA) saying that it will extend the public comment period concerning revised procedures for establishing a federally recognized tribe.
As we say in our August magazine story (below) on the status of Connecticut's tribes and casinos, "Under the proposed changes, Native American tribes would only have to trace ancestry and continuity as a community back to 1934. Currently, they need to trace ancestry and continuity back to “first contact” with European settlers, which in Connecticut means back to the 1600s. In addition, the new proposed rules would make tribes with state recognition virtual shoe-ins to receive federal recognition."
In a Februrary letter to President Barack Obama, requesting that the president consider changes to proposed revisions to tribal recognition rules by the BIA, the governor wrote, "The problem with this proposal is simple: Connecticut has maintained reservations since 1934 for three groups that have already been denied federal recognition precisely because they did not satisfy the core acknowledgement criteria. In other words, after thorough evidentiary processes, involving thousands of pages of evidence, extensive expert testimony, and intensive participation of petitioners, the State, and other interested parties, the Department of the Interior concluded that the existence of a state reservation in Connecticut could not be taken as a proxy for the core acknowledgement criteria. The Department's decisions to deny federal acknowledgement to all three petitioners have been upheld by the courts."
Later in the letter, the governor writes of the proposed changes to law, "For Connecticut, the consequences would be devastating. The petitioning groups have filed or threatened land claims to vast areas of fully developed land in Connecticut. Such claims can cloud the title to real property in the claimed area, causing significant economic hardship to Connecticut residents. All of the petitioning groups have expressed interest in developing casinos and pursuing land claim lawsuits if they obtain federal acknowledgement. Federal reservations and trust lands would be created, exempt from state and regulatory control, resulting in the loss of tax base, the need for increased services from local governments, and extraordinary new demands on the infrastructure of the state."
In his statement Monday, the governor said, “While we are pleased that BIA has extended the comment period, we continue to believe that BIA should convene a public hearing in Connecticut. Given the unique and profound effect this proposed rule would have on our state, Connecticut residents deserve an opportunity to express their views in person with BIA officials, and not just as part of a 50-state teleconference.”
Governor Malloy, Attorney General George Jepsen, Connecticut’s Congressional delegation and other parties last year submitted separate comments to BIA expressing disapproval of particular changes under consideration and all have reiterated those objections in subsequent conversations with federal officials, the governor's release Monday said.
Read our August magazine story status of Native American tribes and casinos in Connecticut, and on the challenges faced by the existing casinos:
The battle finally seemed over.
About a year and a half ago a lawyer for the town of Kent wrote to Bruce Adams, Kent’s first selectman, informing him that the town’s fight to prevent the Schaghticoke Tribe from receiving federal tribal recognition was essentially won. Federal recognition for the Schaghticokes would have potentially paved the way for the tribe to open a casino, possibly in Kent but more likely on purchased property elsewhere in western Connecticut. It would have also lent weight to the tribe’s argument that land once part of the Schaghticoke reservation but currently occupied by the prestigious Kent School (a private boarding school) and housing the town’s sewer treatment plant, as well as several private properties, should be returned to the tribe. But with the arrival of the attorney’s letter, both potential issues seemed things of the past.
“We were of the belief that it was over,” recalls Adams. About a month later he received another letter from the same lawyer, informing him that in Washington there was movement to reform the tribal-recognition process in ways that could drastically alter Kent and Connecticut’s tribal landscape.
(Foxwoods, above, and Mohegan Sun, below, in photos from the state's tourism website, ctvisit.com)
The draft of the proposed reforms, which was publicly released by the U.S. Department of Interior’s Bureau of Indian Affairs (BIA) in May, calls for a rewriting of the Federal Tribal Recognition process. Under the proposed changes, tribes would only have to trace ancestry and continuity as a community back to 1934. Currently, they need to trace ancestry and continuity back to “first contact” with European settlers, which in Connecticut means back to the 1600s. In addition, the new proposed rules would make tribes with state recognition virtual shoe-ins to receive federal recognition.
If the proposed rule changes are enacted, three Connecticut tribes might be in line to receive federal recognition: the aforementioned Schaghticokes in Kent; The Eastern Pequots in North Stonington; and the Golden Hill Paugussetts in Colchester and Trumbull.
If these tribes receive recognition, three more casinos could legally open in Connecticut. But with the existing casinos, Foxwoods Resort Casino and Mohegan Sun, facing declining revenue and the prospect of increased competition from proposed casinos in New York and Massachusetts, economists say opening more casinos here could be quite a gamble.
IF YOU BUILD IT, WILL THEY COME?
“[Gambling] is nowhere near the strength at either Foxwoods or Mohegan Sun that it was 10 years ago,” says Peter M. Gioia, vice president and economist for the Connecticut Business & Industry Association (CBIA).
Over the past few years, the handle (the total amount bet at slot machines) at Foxwoods has declined by more than $800 million per year, from nearly $7.3 billion in the 2011-2012 fiscal year, to $6.5 billion in 2012-2013, to $5.6 billion in 2013-2014. Mohegan Sun has seen a similar decline. In the second quarter of this year the company’s overall profits were down 31.6 percent from the same period last year. In July 2014, both casinos reported significant declines in slot machine betting and revenue.
Gioia says you can see the decreased casino business with your own eyes.
“I remember going to those casinos five or ten years ago. You would go in on a Tuesday afternoon or a Thursday morning and they would be packed,” he says. “You go through there right now on a weekday and even weeknights before Thursday and there’s a lot of sections that are shut down.”
The problem for Connecticut’s existing casinos is twofold, explains Gioia. Neither business has fully recovered from the 2008 recession and now both are facing increased competition from gaming facilities in nearby states such as Rhode Island and New York, with even more likely to come. Plans are underway for three casinos in Massachusetts—though the law allowing these casinos could be repealed by a public vote in November; Mohegan Sun is actually behind one of the projects, a proposed $1.3 billion resort casino in East Boston at Suffolk Downs thoroughbred track. There are also multiple proposals for casinos in New York, including one in Newburgh that could conceivably attract New York City and Fairfield County gamers.
Fred Carstensen, professor of Finance and Economics at the University of Connecticut and director of the Connecticut Center for Economic Analysis, says that “historically 70 to 80 percent of the betting has come from people outside of the state of Connecticut at Foxwoods and Mohegan Sun.”
Thanks to casino development in surrounding states, the number of out-of-state gamers who visit Foxwoods and Mohegan Sun will likely decline, regardless of whether a new casino is built in the state or not.
“The question isn’t will Mohegan Sun and Foxwoods lose some customers to the new casinos, because they will,” Carstensen says. “The really critical question is how much they’re going to lose. If the Massachusetts casinos do get built along with the New York ones, they can easily lose 20 to 25 percent of their betting base.”
Gioia of CBIA says he’s not convinced a new Connecticut casino would be a safe bet. “I don’t’ know if I’d be someone who would want to financially back that expansion,” he says. “You have a market that may be becoming saturated.”