PROVIDENCE, R.I. (WPRI) — Like an echo from pre-pandemic times, a new 20-year contract between Rhode Island and the state’s largest gambling companies is back before lawmakers for consideration this week.
The latest revised deal between gaming technology company IGT (formerly GTECH), casino operator Bally’s Corp. (formerly Twin River) and the R.I. Lottery was unveiled Tuesday. The legislation is scheduled for a House Finance Committee hearing Thursday.
If approved by the General Assembly and Gov. Dan McKee, the state would enter into a two-decade-long contract with the two companies.
IGT and Bally’s would effectively run most of Rhode Island’s gambling industry, including the two state-owned casinos in Lincoln and Tiverton. And while it wasn’t immediately clear how much the contract would be worth, estimates from 2020 pegged the value at about $1 billion over 20 years.
In exchange for the contract, the state would continue to receive its cut of the gambling revenue, which budget officials estimate would total upward of $300 million per year — making it Rhode Island’s third largest revenue source.
The new deal already appears to have the powerful backing of both House Speaker Joe Shekarchi and Senate President Dominick Ruggerio, along with the two gambling companies involved. The two legislative leaders lauded the amended legislation in statements Tuesday.
“The legislation increases revenue to our state and preserves critical jobs,” said Shekarchi, D-Warwick.
Ruggerio likewise pointed to the 1,000-plus jobs the deal would require as a win for the state. Both lawmakers thanked each other and the gambling companies for their partnership.
“The Senate Finance Committee undertook an exhaustive review of this proposal and developed legislation that protects more than 1,000 jobs, guarantees significant capital investment, and preserves the state’s third largest revenue stream,” said Ruggerio, D-North Providence.
Shekarchi said the bill authorizing the 20-year deal will be named the “Marc A. Crisafulli Economic Development Act” in honor of the Bally’s executive, a Rhode Islander who previously worked at IGT when it was GTECH; he is currently facing a serious battle with cancer.
During a news conference Tuesday afternoon, McKee indicated he would support the deal, saying his top concern as governor is keeping jobs in Rhode Island.
The kumbaya attitude between all involved is a stark contrast with 2019, when a bitter fight over future control of the contract spilled out into the public. IGT and Bally’s spent millions on lobbyists, advertising and direct mailings to try and sway opinion among lawmakers and the public.
For the past two decades, IGT has had full control of the state’s lucrative gambling contract, and Bally’s — which operates the casinos in Lincoln and Tiverton on behalf of the state — wanted in on the deal.
Bally’s was especially critical of then-Gov. Gina Raimondo’s administration for barreling forward with the 20-year extension with IGT without going through a competitive bidding process — as is typical for big state contracts. (Bally’s stopped criticizing the lack of a bidding process once it was cut into the deal.)
The 2019 fight turned especially ugly when Crisafulli publicly accused Raimondo’s chief of staff Brett Smiley of threatening regulatory retaliation if the casino operator opposed the IGT deal. Smiley, who denied the allegations, is now mounting a campaign to run for Providence mayor in 2022.
The two companies eventually called a truce in January 2020 and announced a new joint venture that’s largely become the blueprint for the amended legislation unveiled Tuesday.
IGT is still expected to add 100 new jobs, bringing its minimum employment requirement to 1,100. The aggregate payroll must total 250% of minimum wage, guaranteeing $85 million in payroll each year, according to legislative officials.
Bally’s will add 30 new jobs to its corporate headquarters, which it promises to keep in Providence through at least 2043. (IGT will also keep one of its headquarters in Providence for that time period.) Bally’s will also invest $100 million, including a 50,000-square-foot expansion to the Lincoln casino, according to a summary of the terms of the deal.
IGT would control 60% of the joint venture compared to Bally’s 40%, and the companies would be required to replace at least 6% of its gaming machines each year, according to the summary.
As for the changes, legislative officials highlighted the following aspects of the amended deal:
- Upfront payment to state increases from $25 million to $27 million
- Bally’s 30 new jobs must be put into place by Dec. 31, 2021
- Bally’s increases its commitment to the I-195 commission for park naming rights by $200,000
- IGT financial commitment increases from $155 million from $150 million
- The penalty for missed job counts increased to $7,500 per job compared to $6,400 per job
- The venture’s commitment to problem gambling increased from $125,000 to $200,000
“Passage of this legislation will keep IGT’s 1,000 good paying jobs in Rhode Island while adding another 100 and it will ensure that the gaming floor and its slot machines continue to drive over $300 million a year in revenue to the state,” said Jay Gendron, IGT Lottery chief operating officer, said in a statement.
Elizabeth Suever, Bally’s vice president of government relations, also touted the work that would be done on the casino’s existing facilities.
“The project entails the addition of 40,000 square feet to the gaming floor and a 10,000 square foot spa and enhanced food hall area, built entirely by a union workforce,” Suever said in a statement. “Approximately 20 construction trades will be involved in the 12-14 month construction project, which could easily commence within two months of legislation passage.”
House Minority Leader Blake Filippi, R-New Shoreham, has criticized previous iterations of the 20-year deal, arguing the state should not be locking itself into such a lengthy agreement and questioning whether the terms are favorable enough to Rhode Island taxpayers.
Ted Nesi contributed to this report.