Kohut: A Rigged Game, Political Oligarchy Controls State Gaming Monopoly

Bridgeport policy wonk Jeff Kohut writes in this commentary that monopolies are bad for taxpayers, specifically Connecticut’s monopoly with the state’s tribal nations that provides 25 percent of the slot take in exchange for exclusive gaming rights. It leaves a lot of money on the table. “The key,” writes Kohut, “is the establishment of a Bridgeport casino via the passage of enabling legislation in Hartford (THIS SESSION!) for an open, competitive casino development process in Connecticut. Once economically enabled by casino cash, the new, Connecticut urban power axis, led by Bridgeport-New Haven-Waterbury, will politically neutralize the Connecticut Oligarchy and its pernicious, monopolistic modus operandi, such that our state can be reinvented as a prosperous, inviting place (a destination) of vibrant, prosperous, 21st Century cities and town.”

Grab a cup of Joe and check out Kohut’s commentary:

No doubt, there is more than just declining, tribal casino slot money driving the 2018 Connecticut casino debate. When the Connecticut casino gaming controversy is examined in a holistic, historical, state development context, it is difficult to avoid connecting the dots in any pattern that doesn’t suggest game-rigging by the Connecticut Oligarchy (tribal interests notwithstanding). In this regard, it can be stated that, as in all matters “Connecticut,” in 2018, the welfare of the people won’t be allowed to interfere with the interests of the elite and their “special interests.”

Viewed from the larger, political/socioeconomic perspective; presently, and for the better of the past sixty years, (Connecticut) political economic considerations that get political play in Hartford and DC are more about keeping the Connecticut political-economic power-axis-of-control, presently describable in terms of a Stamford/Gold Coast-Hartford/Capital Area power alignment, from transitioning to a dominant Bridgeport-New Haven-Waterbury (et al.) urban alliance.

It’s about maintaining the “status quo”–which is describable as keeping essentially all of the lucrative Connecticut tax base/tax base development and high-end jobs in the Stamford region through political power and economic scraps sharing with the Hartford/Capital region. With this power axis intact, a divide-and-conquer strategy to keep the rest of the state fighting over political and economic development scraps has proven to be enough to maintain the status quo–even as the state circles the socioeconomic commode.

This situation is describable in terms of the maintenance of a power/wealth MONOPOLY by Connecticut’s “usual suspects” oligarchs and their “usual suspects” political lackeys (the latter placed by the former in Hartford and DC). The word “monopoly” is very useful in describing the goals and tactics of the (mostly Fairfield County Gold Coast) Connecticut oligarchs who manipulate the political-socioeconomic game board via their Hartford and DC lackeys.

In 2018, maintaining the Connecticut power/wealth monopoly has as its main (necessary) objective the maintenance of the tribal casino gaming monopoly–which means preventing a casino (or any other significant/jobs-intensive economic development) from becoming reality in Bridgeport.

In order to keep the abundant, lower-wage Bridgeport labor–upon which the Stamford/Gold Coast tax base/lifestyle depends–available, it is necessary to keep jobs-intensive development from occurring in Bridgeport. This implies the prevention of Bridgeport political muscle flexing, which means that money (e.g. casino money) that might fuel political activism and/or create politically potent Bridgeport advocacy (as would be the case were Bridgeport to have a Bridgeport-based governor in Hartford) must not be permitted to flow to, or be generated in Bridgeport.

With New Haven, Waterbury and other Connecticut urban centers also being denied the pursuit of municipal economic prosperity as a result of Stamford/Hartford-driven state development policy, and its direct and indirect effects on their economic development, it is only natural that they would be interested in the pursuit of a political-economic alliance with Bridgeport such that the Stamford/Gold Coast-Hartford/Capital Area stranglehold on political-economic power might be broken.

Presently, the prospect of a Bridgeport casino and its ability to change the political dynamic in Hartford/DC, and the regional economic dynamics of the state, is providing a direct impetus for a multi-municipality alliance (headed by Bridgeport); this situation has the Connecticut oligarchs and their political lackeys (such as State Senator Tim Larson, brother of Connecticut First District Congressman John Larson) doubling down in Hartford and Washington to preclude the possibility of a Bridgeport casino.

Indeed, East Hartford’s State Senator Tim Larson, co-chair of the Public Safety Committee, attempted to derail legislation that would provide for an open, competitive, statewide, all-bidders-welcome casino development process–and which would break the tribal casino monopoly in the state and allow a proposed Bridgeport MGM casino to become a reality. Larson attempted to employ “sleight of parliamentary hand” to deprive the Committee of the opportunity to hold a necessary, crucial vote on the issue, but committee members “smelled a rat” and voted to override the Larson maneuver and hold the vote. The Committee vote allowed the monopoly-breaking bill (to open up a competitive casino development process) to move out of committee for consideration and an ultimate up or down vote in the legislature. (The Larson maneuver would have caused the bill to die in committee.)

It should be noted that Larson is the treasurer for (anti-Bridgeport casino) STAMFORD State Representative William Tong’s state Attorney General campaign. (Just to cite an example of the Stamford/Gold Coast-Hartford/Capital Area Power Axis in action.) It should also be noted that a proposed, off-reservation, tribal casino is poised to be built in Larson’s district in the face of contraindications for such a casino by federal gaming law.

But to digress a bit to better elucidate the destructive, anti-populist mentality and modus operandi of the Connecticut Oligarchy and their political lackeys, by way of specific examples involving high-level government corruption, rooted in the destructive, unvirtuous business environment of monopoly.

Connecticut government has charted an increasingly regressive course for Connecticut government and the Connecticut economy. Indeed, under the Malloy Administration we have witnessed increasing governmental and economic dysfunction and failure even as our northeastern neighbors have managed to adapt and thrive in the post-2008 global economic environment. While Connecticut has resorted to a failed policy of corporate-level bribery in a vain attempt to avert the continuing deconstruction of the Connecticut economy, the rest of the country has largely managed to find its stride in the evolving national/global economy by way of the creativity and measured, pragmatic, cooperative steps of government and business that were, in the fairly recent past, the virtuous basis of Connecticut’s storied “Yankee Ingenuity.” During those not-so-distant times, Connecticut voters were respected for their tradition of the electoral selection of pragmatic political leadership that pursued the creation of an inviting business environment, designed to attract and resonate with developed and emerging business sectors that would guarantee a healthy, growing state economy far into the future. Recall as recently as the ’80s when Connecticut seemed to be a magnet for established and up-and-coming players in the information technology, biotechnology, and materials/advanced-manufacturing sectors. Now, we are the regional poster child for political/socioeconomic dysfunction and infrastructure deficiency.

We only need to look to our immediate west and north for examples of states that are implementing well-considered socioeconomic planning in a context of reliable political pragmatism (even if not in a “squeaky clean” political environment–the latter of which is recognized as an oxymoron by any thinking adult).

In regard to a politically dysfunctional Connecticut and its declining economic fortunes and socioeconomic condition; we can point to a bevy of realities/factors that are at the same time both causal and symptomatic of our condition.

One of the major, co-morbid, contributing political-economic (business) areas that is both causal and symptomatic of our decline is the area of the public- utility monopolies–especially in the critical, economic foundation level energy sector, in which we have a deliberately created (Malloy Administration), state public utility administrative/oversight morass, in the form of DEEP, that was deliberately designed to impede public utility monopoly oversight and state regulation through the creation of a labyrinthine, multi-responsibility department charged with incompatible, simultaneous regulation and oversight of state energy and environmental matters by a single set of bureaucrats. The already dysfunctional, murky regulatory environment of the department of public utility control (DPUC) was folded into the aforementioned morass, permitting even more incestuous government utility relationships in an even less focused, and less objective regulatory environment perfectly designed for obfuscation of corrupt government-public utility interaction. The effects of this latter situation can be readily observed in the unholy, consumer-extorting Malloy Administration natural gas pipeline expansion scheme, which at once provided multi-utility monopolist Eversource (formerly Northeast Utilities) with a means to extort Connecticut consumers with special charges and higher rates for both gas and electricity, even as it chained Connecticut consumers to continued dependence on its expensive, environmentally destructive (fossil fuel) natural gas and natural gas-generated electricity in a context of corrupt, anti-alternative energy political lobbying (which incentivized the Malloy Administration, via political utility collusion, to raid funds from ratepayer accounts previously established by state statute to encourage the development and use of on and off-grid alternative energy options by state energy consumers. The corruption implications here, as well as the economic harm/risk of harm visited on consumers by these political machinations, are obvious.

It must be mentioned at this point that one of the repeatedly cited reasons for leaving Connecticut–or not considering location here by businesses of all sizes–is our most expensive electric energy in the nation status. This is a major factor sinking the Connecticut economy that is caused by the corrupt relationship between monopolistic energy suppliers and state government. And it must be recognized that it is the nature of regulated monopolies to rely on corrupt practices to enhance their government-guaranteed profits via the encouragement of corrupt, incestuous relationships with the regulators/state government, such that economic relationships are cemented by way of government-utility hiring of friends, relatives, and executives/elected officials between government and utilities. (Of course, guaranteed excessive profits, assured by corrupt government regulators, makes utility stocks trading/ownership a lucrative option for the politically connected.)

Might such corruption also be involved in the maintenance of the Tribal Gaming monopoly in Connecticut? Do we need to follow some of that tribal gaming money to Hartford/DC?

So even if we hold the belief that it is sometimes necessary for the government to sanction monopolies–as in the case of necessary utilities where redundant infrastructure, per competition, isn’t workable (e.g. electricity, natural gas, water)–it is readily observable that it is, by its monopolistic nature, economically and politically problematic for consumers and the larger economy. [Indeed; not to further digress, but the indication for public ownership (and ultimately, user-owned, diversified, alternative energy sources as a replacement for energy utilities) of all necessary utilities can be made from these latter economic considerations; especially in the context of the tendency toward inefficiency and functional inadequacy to which monopolistic enterprises are generally prone.]

But to transition to the question of other non-utility, government sanctioned monopolies such as tribal gaming; it can be shown that such monopolies, overall, favor the interests of none of the concerned parties–the tribes/casino investors, government, consumers, and most of all, the affected citizens of the localities/governments involved.

In Connecticut, we have the situation of a government-tribal compact whereby the state and federally recognized Mohegan and Mashantucket Pequot Tribes have been granted exclusive–monopolistic–casino development rights in Connecticut in return for a guaranteed payment of 25% of the slot machine cash intake by the tribal casinos.

At this point in time, with the reality of border state casino competition steadily reducing tribal casino profitability (and the state’s increasingly meager slot payout), and with the slot payout being contingent on the limiting of casino development in the state to the tribes, on tribal lands or other sites needing specific enabling state legislation for such development (within the context of restrictive federal law defining tribal prerogatives and limitations with respect to gaming), it would seem that the time has come to end what has become an economically contraindicated situation for all concerned.

If the gaming business options of the tribes are protected (and limited) by government sanction, and limited by contractual agreement, their focus, and a significant portion of their profits (25% of slot income) will be diverted from reinvestment. This is not a good business situation for the tribes and not an economically viable (or fair) situation for the Connecticut citizenry in need of the expanded jobs and tax base options that an open, competitive, multi-corporation casino development situation would entail for Connecticut.

As is true in all business sectors, a competition-based business ecosystem will always encourage more business and better product (diversity/quality multiple business streams) and ultimately benefit all entities involved–business and consumer.

Just as multi-restaurant, multi-venue dining-entertainment districts draw a collectively larger consumer audience for all venues involved, such that there are more consumers for each entity, drawn by the diversity of the collective offerings than would be drawn by any stand-alone entity in the district, such is the nature of casino gambling. As each venue develops unique variations of standard offerings, as well as its own unique, additional entertainment, dining, retail, and adventure offerings, an increasingly larger collective audience will be drawn to the general area to sample the unique offerings, and ultimately all the individual players will have a larger potential clientele. And, in this context, the state and municipalities involved will benefit from expanded revenue/tax base and jobs opportunities.

So we can see that Connecticut–aka Corrupticut–has become a failed state because of the selfish, monopolistic mindset and practices of the Connecticut Oligarchy and their political lackeys. It isn’t out of guilt or sympathy for Native Americans or poor, gambling, jobless Connecticutians that the Stamford/Gold Coast-Hartford/Capital Area Power Axis (Connecticut Oligarchy) wants to limit casino development options to the tribal players. It’s all about the Oligarchy maintaining its power and elitist options. If a casino–and money and political power–come to Bridgeport and its allies, the game changes. The “good times” are over for the Oligarchy.

But similarly, when the good times end for the Oligarchy–when power shifts to the presently distressed urban areas led by Bridgeport, with a Bridgeport governor in Hartford–the state as a whole will be able to revive and prosper as economic development and wealth become delocalized (and the Stamford economic development/traffic logjam is obviated) and commerce and jobs flock to, and flow throughout the state.

The key is the establishment of a Bridgeport casino via the passage of enabling legislation in Hartford (THIS SESSION!) for an open, competitive casino development process in Connecticut. Once economically enabled by casino cash, the new Connecticut urban power axis, led by Bridgeport-New Haven-Waterbury, will politically neutralize the Connecticut Oligarchy and its pernicious, monopolistic modus operandi, such that our state can be reinvented as a prosperous, inviting place (a destination) of vibrant, prosperous, 21st-Century cities and towns.