Rhode Island’s two gambling companies are locked in a nasty joust over millions in state money. The Public’s Radio political analyst Scott MacKay says it’s time to ratchet down the rhetoric and seek a solution. (Advance copy of commentary scheduled to air Monday.)
Even a casual follower of Rhode Island politics would have to be living off the grid in a yurt to avoid the bitter campaign between IGT, which provides technology and machines to the state’s casinos, and Twin River, which runs the state’s two legal gambling venues.
The IGT-Twin River feud is all over the news media. The increasing nastiness of the advertising campaign is on every day in print and broadcast media. The arguments are getting stale, but they keep coming –IGT says Twin River is a mere “hospitality company” that is only looking “for a bigger pay day.” Twin River counters that IGT is the beneficiary of a “no-bid” contract fashioned secretly by Gov. Gina Raimondo and IGT executives.
At stake is about $400 million in state money needed to fix and police the roads, educate the kids and finance state agencies. After the income and sales taxes, this represents the third largest source of state revenue.
With so much at stake, it’s probably no surprise that millions are being spent lobbying lawmakers, who will make the final decisions. It seems like every lobbyist, advertising exec and public relations flack who isn’t under investigation is harvesting gobs of money working for either IGT or Twin River.
The backdrop to this fight is that politicians love this money. It gives voters the impression that they can have government services without paying for them through taxes. But Connecticut, Rhode Island and Massachusetts are all in competition for gambling money and other ways of fleecing those who clock to these venues. The vault of gold promised to states by legal gambling isn’t bottomless.
The result is that even the fancy new casinos in Springfield and Boston are not meeting expectations. Yet they are siphoning gamblers from Rhode Island. After the $2.6 billion Encore casino opened near Boston, Twin River’s table games profits dropped more than one-third in July. And the market keeps getting Balkanized. The Boston Globe reported last week that revenues dropped below expectations even at the glitzy Encore in September.
Richard McGowan of Boston College studies the gambling industry and has a blunt warning. The gambling market, he says, isn’t going to grow.
All of this makes the smallest state’s biggest political fight look silly and short-sighted. IGT believes it should get the 20-year renewal of its state contract because it is headquartered in Providence and provides more than 1,000 good-paying jobs. Their executives cite as precedent the deal its predecessor company, GTECH, received in the early 1990s from then-Gov. Don Carcieri.
But times have changed. GTECH then was a home-grown Rhode Island company that is now IGT, owned by European interests. They could move anywhere they want, given that technology these days knows no state, or even national, border.
Twin River operates the two casinos and can’t just up and leave. They want a bigger share of the money and say they would bring in a partner to run the technology. Both companies are fine corporate neighbors, contributing to charities and paying decent wages.
It’s time for someone with authority on Smith Hill –House Speaker Nick Mattiello, Senate President Dominick Ruggerio—or preferably both, to step up. They need to say, loudly, enough.
Get the top brass from both companies in a room. Find out what each needs to stop the bleeding and forge an agreement neither likes, but that they can live with. Perhaps that means IGT gets a 12 or 15 year contract. And Twin River, facing competition from Massachusetts, gets a reasonable percentage break on its table game taxes.
It would be better for both companies to steer the money they are blowing on lobbyists and flacks to just about any other purpose. Wouldn’t it be great if Twin River shifted that money to advertising that brought new business to its venues?
There is precedent for this. It’s the way Gov. Bruce Sundlun finessed the Green Airport expansion and how Gov. Lincoln Almond got Fidelity to come to Rhode Island.
The stakes are much too high to allow IGT and Twin River to keep this charade going while Rhode Island loses gambling business to other states.
Scott MacKay’s commentary can be heard every Monday at 6:45 and 8:45 and at 5:44 in the afternoon. You can also follow his reporting and analysis at our web site at Thepublicsradio.org
