Dave Fallon: Remind us why the debate about the IGT extension is such a big deal.
Ian Donnis: Well, for starters gambling is Rhode Island’s third largest source of revenue. This proposed extension would be for 20 years. People can criticize the fact that Rhode Island is so reliant on gambling revenue, but the simple fact is that gambling between the casinos and the lottery produces about $400 million each year. And without that, there would have to be some pretty sharp cuts in a state budget that is already persistently plagued by budget deficits.
Dave Fallon: Speaking of competition, Governor Gina Raimondo supports giving IGT a no-bid 20 year extension. Would it be better for taxpayers to put this work out for open bidding?
Ian Donnis: That’s really a subject of sharp debate right now. Some people believe as matter of fact that competition is always a good thing. Twin River, the company that runs the casinos in Tiverton and Lincoln, would like to make a competing offer. It’s partnered up with a Canadian firm Camelot Lottery Systems. But Governor Gina Raimondo and her people say that Twin River is not a technology company. They say there are only three companies in the world with the tech expertise to do what IGT does, and that IGT has its North American headquarters right here in Providence. And they say Rhode Island would get a lot of benefits from this proposed 20 year, $1 billion extension including an uptick in jobs from about 1,000 to 1,100 and various improvements to the state gambling operations that they say are worth hundreds of millions of dollars.
Dave Fallon: Why is this coming up right now?
Ian Donnis: Well, IGT, many people know this, started as a local company called GTECH back in 2003. GTECH signed a 20 year deal with the state. It created its downtown headquarters that can be seen from the State House. But now IGT is owned by an Italian company. And Governor Raimondo’s administration says that increases the risk that IGT will take jobs out of Rhode Island without a new deal. Here’s Kevin Gallagher, a top aide to the governor, speaking to the Senate Finance Committee on Tuesday.
Kevin Gallagher: IGT, as the governor, mentioned is going through a global consolidation like in 2003. It has the option to leave the state, and depending on our actions that global consolidation will either move jobs into Rhode Island or out of Rhode Island. And we came close to losing GTECH the last time, and frankly they have even less of a reason to stay here now if they don’t have this contract.
Dave Fallon: So, Ian, what are lawmakers saying about all this?
Ian Donnis: We’re seeing various levels of skepticism. There is some concern about whether some of the pledges being made by IGT are actually spelled out in legislation. Here’s one of the observations from Senate Finance Chairman William Conley during Tuesday’s hearing.
William Conley: What does it mean to have it located here? Once again, I think, if you read the legislation, you don’t really see that or get a sense of that. That’s an example of a critical component. You know a substantial presence – I don’t know what substantial means, but I do think that now that we have that building in the air that’s an important component of what I’m talking about when there’s this gap between the legislation and the master agreement.
Ian Donnis: And there are questions too about whether a 20 year extension would be wise at a time when technology is changing so rapidly. The response from the Raimondo administration is that there are guarantees, or would be guarantees, in the contract to ensure that technology remains up to date and fresh. There’s debate too about whether a request for proposal, RFP, process would be better. The administration points to how enabling legislation has always been used in Rhode Island over the last two decades or so for these kind of gambling deals. While people might criticize it as no-bid thing, it does allow for the kind of public hearings that we’re seeing and public input.
Dave Fallon: How and when will this get decided?
Ian Donnis: The legislature is continuing its hearings throughout this month. It’s possible there could be even more hearings after that. There are a lot of questions about where this is headed: whether lawmakers will decide to back the IGT deal, whether they would open this to other offers. All that is really unclear at this point, but we will keep a close eye on the process.
Dave Fallon: Ian, thanks for bringing us up to speed about this.
Ian Donnis: Thank you, Dave.
Disclosure: IGT is a financial supporter of The Public’s Radio.
