Rhode Island’s House Speaker Joe Shekarchi wants more money from IGT and its partner Bally’s to run the state lottery for 20 years.
IGT and the company that used to be Twin River say they need the deal as originally negotiated to help them both recover from the effects of the Covid-19 shutdowns.
Former Governor Gina Raimondo’s no bid $1 billion proposal submitted to the legislature in 2019 was instantly controversial. In an interview with the Providence Journal on April 27 the Speaker said he wants more money for the state. Gaming is Rhode Island’s third largest source of government revenue and until last year produced $400 million a year. The former governor recently joined the Biden administration as commerce secretary.
Shekarchi commented, “With all due respect to Governor Raimondo and her administration … I’d like a better deal.” Shekarchi said he has been working on an updated deal during the legislature’s break. “I hope in a couple of weeks we’ll have an agreement, but we are not there yet,” he said. He has met with principals from IGT and Bally’s and said Senate President Dominick Ruggerio and Governor Dan McKee support his goals.
The existing bill would commit IGT to providing 1,100 jobs with the guarantee of exclusive control until 2043 of Keno machines and other Lottery products in the two former Twin River casinos and in retails stores that carry Lottery machines.
The $1 billion deal would help finance the expansion of Twin River Casino Hotel in Lincoln. Bally’s (Twin River) would be committed to adding at least 30 top management positions and to paying 150 percent of the state’s minimum wage to employees. Penalties would be assessed for not meeting this goal.
Shekarchi says he wants a better deal. “Under the current proposal, the state would get $25 million spread over two years in exchange for a one-of-a-kind, 20-year contract,” he said, plus more capital investment. “Wages are also something that I am looking at, and I will leave it at that.” He added, “To me it’s about looking at the whole package. You can’t look at one area without looking at the rest.”
IGT Chairman Robert K. Vincent commented about the urgency of getting a deal nailed down after the disruptions to the industry of Covid. “In short, we remain steadfastly committed to carrying out this deal, which is at its heart one of the largest economic development packages put forth in recent history here in RI,” adding “At the same time, I must also tell you that … one of the major areas of cost savings is in our real estate footprint.”
A report to the legislature that was made by Christiansen Capital Advisors in January 2020 warned, “It is important to remember that, in 2020, this is more than just a contract extension. By entering into this contract, the Rhode Island General Assembly would also be locking in gambling policy for the next 23 years.”