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Docs reveal Twin River sought no-bid deal like IGT’s

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PROVIDENCE, R.I. (WPRI) — A top aide to Gov. Gina Raimondo and the chairman of gaming tech company IGT are accusing Twin River executives of hypocrisy after a document emerged showing the company sought the same type of no-bid contract with the state it now criticizes being offered to IGT.

Documents obtained Thursday by the Target 12 Investigators show a top Twin River executive, Marc Crisafulli, proposed in April that his company be given monopoly control of all lottery and gaming services in Rhode Island, from scratch tickets to video lottery terminals, or VLTs. The idea was contained in a presentation he made to Raimondo aide Kevin Gallagher, her point man on the gaming negotiations.

Gallagher and IGT Chairman Robert Vincent argued the revelation shows Twin River hasn’t been forthright in making its case against the proposed IGT contract extension, which among other provisions would allow IGT to continue to control 85% of VLTs on the floors of the state’s two casinos run by Twin River.

“I find it ironic that Mr. Crisafulli is claiming that giving a company 100% of the machines ‘would have devastating consequences,'” Gallagher said in a statement. “That was not his position when he approached us this spring asking for the state to award Twin River 100% of the machines. He only talked about how great it would be.”

The documents — provided by the governor’s office under the Access to Public Records Act — shed more light on what happened behind the scenes before Twin River began its recent public assault against the Raimondo administration’s proposal to give IGT a 20-year extension of its Carcieri-era contract to provide the services. At stake is Rhode Island’s third largest source of state revenue, worth roughly $400 million annually.

A slide presented to Gallagher on April 23 by Crisafulli, a former IGT executive who recently joined Twin River, shows the casino operator offered to pay $75 million for a 20-year agreement to provide “all lottery and gaming services” once IGT’s current contract ends in 2023. He also guaranteed to keep Twin River’s headquarters in Rhode Island and maintain at least 1,500 full-time employees.

Such a move would be a shift for Twin River, which is currently a venue operator, not a technology provider like IGT.

“IGT manufactures VLTs (with a VLT depot right in West Greenwich where technicians repair and fix them),” Gallagher said. “Twin River does not manufacture VLTs. I don’t see how or why we would end a contract with a Rhode Island employer/VLT manufacturer and give that contract to a company that doesn’t manufacture VLTs.”

Vincent was even more critical. His company takes in roughy $50 million a year from its lucrative long-term contract in Rhode Island, and in exchange for keeping that revenue stream for another 20 years the company has offered to maintain a headquarters at its tower in downtown Providence and employ at least 1,100 workers in Rhode Island.

“After a week and a half of posturing by Twin River, the truth has come out about their deceptions and manipulations of the public and the media,” he said. “Their motives were clearly not about protecting taxpayers but rather benefiting the Twin River shareholders.”

“Twin River not only wanted 100% of the machines, they wanted to take over the entire lottery system — something they have no experience or capabilities to fulfill,” Vincent added. “Amazingly, they wanted to do it in a no-bid manner.”.

Vincent has also warned that IGT not getting its contract extension could result in Rhode Island losing many of its more than 1,000 jobs.

Patti Doyle, a spokesperson for Twin River, insisted that the casino operator only made its no-bid offer in April after state leaders refused its pleas to put the contract for all gaming services out to bid.

“As we’ve publicly outlined, when we learned the governor intended to extend the billion-dollar IGT contract for another 20 years without a public bid process, we felt a responsibility to offer alternatives that would be far more beneficial to the state and its taxpayers,” Doyle said in an email.

However, Doyle was not immediately able to say whether Twin River documented that request for a public-bidding process, and Gallagher disputed the story.

“It never came up in my meetings with Twin River,” he said. “Not once.”

Doyle maintained that the deal outlined in the slide “underscores what a bad deal the state is currently getting from IGT as this was significantly more than IGT — or anyone — was prepared to offer.” She added, “Any responsible executive branch receiving an offer like that would have put the contract out to bid to let the market determine their worth.”

The documents show Twin River quickly abandoned its April 23 proposal to cut out IGT, pivoting by May 14 to an alternative that would split the gaming-services contract with IGT. Target 12 first reported Wednesday that Twin River presented the same idea on May 20 to IGT leaders, who rejected it out of hand, with Vincent saying he saw it as an implied threat.

“They suggested to us that we should walk away from tens of millions of dollars in revenue we currently have and cut them in, so they would go to the State House and this would be a joint deal,” Vincent said. “What they were clearly implying was that, ‘You’re not going to get this without us.'”

Crisafulli argues Twin River’s intervention forced IGT to sweeten its offer to Rhode Island for a contract extension. Gallagher acknowledged the terms of the deal changed repeatedly between January and June, but insisted there was never a tentative deal in place until the one that was publicly announced in late June.

Twin River has also argued publicly that IGT’s VLT machines are underperforming. However, a May 17 memo from lottery officials to Gallagher said 22 of the 25 top-performing VLTs at the casinos were IGT’s, and said Twin River officials cherry-picked data to make IGT’s numbers look worse.

The same memo said lottery officials had found “not one mention of underperforming games or lack of new games” by Twin River officials in meeting minutes dating back to 2012, and also paraphrased Twin River’s director of slots as saying in June 2018, “The current gaming floor has the best mix of game products since Twin River’s inception.”

Separately on Thursday, lottery spokesperson Paul Grimaldi confirmed that Twin River did not go through a public bidding process to obtain its current contract to run the casinos in Lincoln and Tiverton. “The General Assembly authorized a no-bid contract in 2005 for the operation now known as Twin River Casino,” he said. Twin River’s current contract continues through 2020, with the option for two five-year extensions.

Doyle dismissed any comparison between Twin River’s no-bid contract and IGT’s proposed no-bid contract as “apples to oranges,” saying, “Rhode Island law would require a public referendum to offer gaming at any location other than the two buildings owned by Twin River.”

Ted Nesi (tnesi@wpri.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

Eli Sherman (esherman@wpri.com) is a Target 12 investigative reporter for WPRI 12. Follow him on Twitter

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