The Pallister government's opposition to a new casino in Winnipeg has left Manitoba First Nations no choice but to explore their legal options, says Assembly of Manitoba Chiefs Grand Chief Derek Nepinak.

"Winnipeg is the gaming market in Manitoba and for us to be shoved aside and kept out of the prime gaming market is unjust. It's in bad faith and we aren't going to stand for that," he said.

"We are upping the stakes by looking at our legal options and moving from there."

Nepinak made the comments following a 2 ½-hour closed door meeting with First Nations chiefs across Manitoba to discuss gaming options in the province.

The meeting comes two days after Glenn Hudson, Peguis First Nation's newly elected chief, re-signed a memorandum of understanding with the Aseneskak Company Inc., the First Nations controlled company that runs the Aseneskak Casino near The Pas.

A key aspect of the partnership is idea of moving the casino to land owned by Peguis First Nation near Assiniboia Downs.

Nepinak said it is too early to speculate how those legal actions might take shape, but said they "are well-positioned to advance this discussion."

"We tried to negotiate, we tried to initiate meetings. I have met with the premier, I have met with his gaming minister and we brought the issue forward on more than one occasion," he said.

"The fact that the province continues to keep the door closed on this discussion is very problematic and we are looking at all of our available options ... and that also should include our legal options."

Oversaturated market?

When members of Aseneskak Company's board first mused of relocating its faltering casino from Opaskwayak Cree Nation to Winnipeg last year, Premier Brian Pallister made his opinion quite clear.

"Absolutely no," Pallister told reporters in September.

At the time, Pallister pointed to a 2016 Gaming Market Study showing the casino market is oversupplied throughout the province, including in the capital city.

When asked for comment about the commitment to push the province harder on the issue on Thursday, Justice Minister Heather Stefanson said the government has not received a formal offer for a casino or expansion at Assiniboia Downs.

In a prepared statement, she said any proposal for an increase in gaming must be supported by a market analysis and viable business plan.

"We are committed to ensuring that gaming in Manitoba is pursued in a manner that is both financially viable and socially responsible," she said.

A market study commissioned by Peguis in 2014 proves it would be viable, Hudson said. However, he said he hasn't shared it with the province since he was only elected earlier this month.

"It recommended that the location is prime and there is opportunity within the city to push through gaming," he said.

Hudson declined to share the study with CBC News.

Urban reserve near the Downs

In 2013, Peguis partnered with the Manitoba Jockey Club — the non-profit group which owns Assiniboia Downs — with plans to develop a multimillion-dollar urban reserve that would include a hotel, conference centre, retail and possibly a casino near the race track.

The master plan for Assiniboia Downs approved by Winnipeg city council last year includes the provision for "on-site gaming."

"We signed the partnership to look at these arrangements," said Hudson when asked about the MOU with Aseneskak and its relationship to moving the casino as part of its development plan.

Assiniboia Downs CEO Darren Dunn declined to comment on the province's position on a new casino. He said he continues to meet with Hudson to finalize the plans and details related to the land development, not the casino.

A broken promise

Both Nepinak and Hudson were quick to mention that it was the previous Progressive Conservative government that partnered with First Nations in 1999 to open five Indigenous-run casinos in Manitoba.

Only three were built — Aseneskak, South Beach Casino and Resort on the Brokenhead Ojibway First Nation and Sand Hills Casino in Carberry. Meanwhile, there are two casinos in Winnipeg owned and operated by Manitoba Liquor & Lotteries — McPhillips Station Casino and Club Regent Casino.

"What we have seen in the past 20 years is a slanted gaming economy where the province is acting as both the monopoly and the regulator, that's a conflict of interest," said Nepinak.

The pair also take issue with the opening of the Shark Club Gaming Centre with the blessing of the former NDP government. The sports bar and casino near the MTS Centre opened in 2013 and is run by True North Sports and Entertainment.