A Rhode Island state House committee has approved a reworked no-bid deal for International Game Technology and partner Bally’s Corporation under which IGT will have a 20-year contract as the exclusive supplier of systems, software and hardware to the Rhode Island Lottery and the two casinos owned by Bally’s in the state, the Twin River Casino Hotel and the Tiverton Casino Hotel.
Under Rhode Island’s law, the lottery operates the video lottery terminals and table games at the casino, with slots leased from IGT.
Under the contract, approved by a 10-2 House Finance Committee vote, in exchange for the exclusive supply deal, which would start in two years and extend through 2043, IGT and Bally’s would create more than 1,100 jobs in Rhode Island.
Not all lawmakers are in favor of the deal. House Republican Leader Black Filippi questions why the state would only tax casino table games at 12.7 percent when nearby Massachusetts taxes the tribal casinos 25 percent on table revenue.
“It’s our business,” Filippi told the Providence Journal. “They are our agents. In Massachusetts, right across the border, where the license belongs to the casino owner, they pay 25 percent of the revenues from the tables to the state. Why are we getting half? That’s $20 million a year, and for the next 20 years, that equals $400 million.”
Filippi also questioned the wisdom of a 20-year contract with a technology contract, saying, “Twenty years ago, I think I still had a beeper or a flip phone.”
The new arrangement comes in the wake of a year of Covid-related losses, with a 32 percent drop in revenue for 2020.
The supplier’s current contract, signed in 2003, gave the company “the right to be the lottery’s exclusive vendor of hardware and software, together with the related services necessary for the operation of the Lottery’s computerized games, through June 30, 2023.” In return, IGT made a one-time payment of $12.5 million to the lottery as consideration of the exclusivity.
The proposed new deal would require IGT to make an up-front payment of $27 million.
The bill now goes to the full House for a vote.