IGT, Twin River reach a truce; new proposal would not go out to bid

Business News

PROVIDENCE, R.I. (WPRI) — IGT and Twin River executives announced a truce Thursday in their nearly year-long war over Rhode Island’s lucrative lottery-technology contract, revealing the companies have reached agreement on a proposal that will satisfy both sides if approved by the legislature.

The reconciliation keeps much of the current proposal in place, but includes a plan that would result in a new, joint venture between IGT and Twin River to provide 100% of the video lottery terminals, or slot machines, at the state-owned casinos in Lincoln and Tiverton. That’s a major change from last year’s IGT-only proposal, which would have let the gaming technology company control 80% of the gaming machines without any involvement from Twin River.

“We think this is the best possible solution,” said IGT Global Corp. Chairman Robert Vincent.

Other key elements of the deal include IGT keeping its offices and jobs in Providence, raising salaries to 250% of the median wage compared to 150% in the current proposal, and Twin River building 40,000 square feet of additional gaming space and a 14,000-square-foot spa in the hotel, both in Lincoln.

Additionally, Twin River will split the first floor of the Lincoln casino in half between smoking and non-smoking areas. Twin River is also committing to a new 12,000-square-foot headquarters in Providence and currently leases space at 100 Westminster St. in Providence. Former Providence Mayor Joe Paolino Jr., who owns the building, said the company is currently working on a deal for them to expand.

Officials from the two gaming companies made the announcement together at IGT’s downtown Providence headquarters — a sharp contrast from just a few months ago, when Twin River was savaging Democratic Gov. Gina Raimondo’s proposal to extend IGT’s current contract for another 20 years. The two companies have spent millions on lobbyists and advertising as they battled it out.

“What has been said and done, has been said and done,” Vincent said about the bitter fight between the companies.

The new deal, if approved by the General Assembly and Raimondo, would not go through a competitive bidding process, despite adamant criticism of that approach from Twin River executive vice president Marc Crisafulli since IGT’s original proposal emerged last June.

But his tune has changed now that his company would be part of the controlling entity. Twin River would own 40% of the new joint venture compared to 60% owned by IGT. Additionally, Twin River would seek a license to provide games and acquire 23% of the space in the casinos beginning this year.

And because there would be no public bidding process, Twin River would end its Rhode Island business relationships with Camelot Lottery Solutions and Intralot, which had both emerged as partners in the Twin River campaign against IGT.

“It’s the right place for us to be,” Crisafulli said about the new deal.

Having the state’s two most important gaming entities on the same page is likely to be a relief to state leaders who are seeking to protect the third-largest source of state revenue as well as over 1,000 jobs at IGT. Senate President Dominick Ruggerio played an integral role in getting the two companies to come together to discuss the reconciliation.

Vincent described the two initial meetings as “frosty.”

“I am pleased that these two valued Rhode Island companies came together to work in partnership for the mutual benefit of both companies and, most importantly, all Rhode Islanders,” Ruggerio said in a statement. “The state’s taxpayers will be the ultimate beneficiaries of a successful economic development partnership that maintains good jobs while protecting and hopefully enhancing an important state revenue stream.”

The news conference came just days after House Speaker Nicholas Mattiello’s office released an independent analysis of Raimondo’s original proposed IGT deal that raised concerns about the wisdom of giving the company a contract lasting two decades. Its current 20-year agreement was negotiated by then-Gov. Don Carcieri in 2003, when the company was still GTECH.

Mattiello said he was pleased that the two companies were putting the needs of the taxpayers first.

“I am also pleased that the proposed plan protects the 1,100 existing IGT jobs – that has always been one of my main concerns,” he said in a statement. “With that said, the House will have a full and thorough public review of this proposal and attendant legislation.”

The new proposal would remain a 20-year deal, which both Crisafulli and Vincent agreed is a good length of time considering the importance of the deal to Rhode Island’s budget. A five-member board chaired by IGT would control the new joint venture.

When asked whether they had any regrets about the amount of time and money spent over the last year fighting over the $1 billion contract, both executives said they were moving on.

“I have no regrets, whatsoever,” Crisafulli said.

The Twin River executive led the opposition against the original IGT proposal, which was championed by Raimondo. The public campaign turned especially ugly in October when Crisafulli accused Raimondo’s then-chief of staff, Brett Smiley, of threatening retaliation if the casino operator opposed the proposed IGT deal.

Smiley, who is now the governor’s pick to lead the R.I. Department of Administration, has denied the claim. When asked about it Thursday, Crisafulli said he stands by the accusation and that it hasn’t been resolved, but declined to comment further.

Raimondo spokesperson Josh Block offered a muted response to the new proposal.

“The governor’s priority all along has been protecting Rhode Island’s jobs, protecting our revenue, and guaranteeing high-quality gaming services for Rhode Islanders,” Block wrote in an email. “We look forward to reviewing this new proposal as it makes its way through the legislative process.”

Steve Frias, Rhode Island’s Republican national committeeman, who ran unsuccessful campaigns against Mattiello in 2016 and 2018, offered a more critical view of the proposal.

“This deal does not automatically become a good one for taxpayers because IGT and Twin River will now be business partners,” he wrote in an email. “This deal may now be good for both IGT and Twin River, but it remains a risky deal for taxpayers because we will be locking ourselves into a no-bid contract affecting our third largest source of revenue for the next 20 years.”

Frias added, “If the General Assembly approves this deal, they will be engaging in fiscal malpractice.”

Eli Sherman (esherman@wpri.com) is an investigative reporter for WPRI 12. Connect with him on Twitter and on Facebook.

Ted Nesi and Kim Kalunian contributed to this report.

Correction: A previous version of this story said Twin River was committing to downtown headquarters at 100 Westminster St.

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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