MGM-Foxwoods deal


MASHANTUCKET, Conn. (AP) – State officials demanded Tuesday to review a deal that would put the MGM Grand name on a new hotel and casino expansion at the Foxwoods Resort Casino.

The Mashantucket Pequot tribe announced it is leasing the name from MGM Mirage for the $700 million project. The new hotel and casino will be called the MGM Grand, but will be operated by Foxwoods, MGM and tribal officials said.

The state’s gaming compact with the tribe requires the state to sign off on any casino expansion, Attorney General Richard Blumenthal said.

“The nature of their business relationship is a mystery,” Blumenthal said. “They have given us no details nor have they given details to any state agency, including the Department of Revenue Services.”

Blumenthal and Paul Young, the state’s special revenue commissioner, sent a letter to the tribe requesting copies of the agreement and any agreement-related documents.

A spokesman for the tribe said its lawyers are reviewing the letter and will respond, but said he could not comment further.

Terry Lanni, chairman and chief executive of MGM Mirage, said the Las Vegas-based entertainment company will only help the Mashantucket Pequots design and develop the project.

“We’ll have nothing to do with the management of it,” he said.

Michael J. Thomas, chairman of the Mashantucket Pequot Tribal Nation, was more adamant. “We’ll run our own thing at Mashantucket forever,” he said.

The agreement gives Foxwoods an experienced partner as it tries to expand its convention and entertainment business and attract more minorities. Foxwoods will have access to MGM’s database of more than 22 million customers and will use MGM’s partnerships with other companies to help attract new restaurants and top-tier entertainers to eastern Connecticut, said Foxwoods chief executive William Sherlock.

Las Vegas-based MGM Mirage owns and operates 24 casinos in Nevada, Mississippi and Michigan. Its Las Vegas properties include the MGM Grand, the Bellagio and Mirage hotels.

“They have some tremendous connections and alliances with restaurant operators and a tremendous access to entertainment,” Sherlock said.

By partnering with Foxwoods, MGM gets brand exposure in the lucrative Northeast gaming market, which is dominated by Foxwoods and Mohegan Sun. MGM does not operate an East Coast casino, though it is a partial investor in the Borgata in Atlantic City.

Sherlock said he expects to add the MGM name to future projects as part of an ongoing marketing deal between the two companies.

The terms of the deal were not immediately released. The tribe does not release financial figures.

“I don’t know if you’ll see a lot of change at Foxwoods directly, said Michael Thomas, the chairman of the Mashantucket Pequot tribe, which runs Foxwoods. “This facility will obviously be an MGM facility.”

Lanni said the two parties have “signed this understanding to come up with ideas and we’ll be exploring that now.”

He would not say when MGM and the Mashantucket Pequots will announce a new project or venture. “We’re going to do things when they’re right to do,” he said.

The Foxwoods expansion includes plans for an 825-room hotel, 5,000-seat theater, a convention center and ballroom, nightclubs and 1,500 more slot machines.

Under its gaming compact, Foxwoods provides the state with a quarter of slot revenues.

“I would think that people at the state level would be thrilled with this,” Thomas said. They will get more money, faster.”

The two companies also agreed to collaborate on casino investments off the reservation, with MGM lending $200 million to the tribe’s development company. The Mashantuckets are already planning a 600-acre resort and casino in the U.S. Virgin Islands.

MGM is scheduled to release first-quarter earnings this week. Fourth-quarter earnings were up 31 percent to $97.8 million, the company said in February.

Shares of MGM closed at $43.88, up 39 cents, on the New York Stock Exchange.