PROVIDENCE, R.I. (WPRI) — State leaders on Thursday afternoon announced a surprise deal with gaming giant IGT they say will keep the company’s U.S. headquarters in Rhode Island through 2043.
The company — formerly known as GTECH — occupies one of the most prominent buildings in downtown Providence, the tower at 10 Memorial Boulevard that now houses the Capital Grille on its first floor. Its current lease was scheduled to expire in 2023 under a previous deal with the state.
“Today’s announcement ensures the company can continue to grow and thrive in our state while providing Rhode Islanders with some of the highest-quality games anywhere in the country,” Gov. Gina Raimondo said in a statement. “This innovative agreement keeps Rhode Island – and Rhode Island’s jobs – at the center of this modern and evolving industry.”
The governor’s office said the proposed 20-year deal would require IGT to make a $25 million payment to the state, spread over the 2020-21 and 2021-22 budgets; make capital investments totaling $150 million over 20 years; and keep at least 1,100 permanent jobs in Rhode Island.
Other provisions include a right of first refusal for Rhode Island leaders on any IGT expansions involving at least 30 jobs; the rollout of new lottery technology; and the replacement of more than 900 video lottery terminals at Twin River Lincoln by the end of 2020.
For IGT, the deal could potentially provide a major financial boost. Currently, the company earns 1% of all lottery sales between $275 million and $400 million; that would increase to 4% under the new deal, according to documents provided by the governor’s office. Its right to 5% of all sales under $275 million and over $400 million would remain the same.
In a statement, IGT Chairman Robert Vincent said the agreement “is a product of months of discussions and negotiations.” He described it as part of a “successful economic development partnership” that “has been beneficial for both parties.”
But not everyone is enamored with the deal.
Patti Doyle, spokesperson for Twin River, in a statement raised concerns and questioned the timing of the “no-bid, billion dollar, 20-year contract.”
“To give one gaming company monopoly control of the machines on the casino floor is unprecedented in the industry and is significantly harming Rhode Island taxpayers,” Doyle said. “If this contract was competitively bid, we believe the upfront payment amount to the State for these gaming rights would exceed $100 million. Without a doubt, this contract strays far beyond industry norms.”
Legislation codifying the deal nonetheless is expected to be introduced in the General Assembly later Thursday, but House and Senate leaders said they will wait to hold hearings and votes on the agreement until later in the year rather than rush it through in the final two days of the legislative session.
“Since it is close to the end of the regular legislative session, I intend to introduce the legislation today so it is available for public inspection over the next few months, then return for a special session in the fall to thoroughly review and analyze the bill through the committee process before it is considered,” Senate President Dominick Ruggerio said.
Vincent said, “We particularly want to thank the speaker and Senate president for their willingness to address this legislation in a timely manner.”
Rumors had swirled in recent months that IGT leaders were considering a move out of state, potentially to Massachusetts.
GTECH agreed to its current contract with the Rhode Island Lottery in 2003, when it was ratified in statute by lawmakers and then-Gov. Don Carcieri. It gave the company exclusive rights for 20 years to provide online, instant-ticket and video lottery systems in Rhode Island.
In exchange, the gambling-software company agreed to develop its current headquarters in downtown Providence. The company also agreed to invest about $100 million in new systems, software and services during the term of the contract, according to the legislation.
Ted Nesi (email@example.com) is WPRI 12’s politics and business editor and a Target 12 investigative reporter. He is a weekly panelist on Newsmakers and hosts Executive Suite. Follow him on Twitter and Facebook