Momentum grows for expanded gambling

WORTH THE RISK? While Newport Grand Slots has expanded in recent years to include virtual table games, the facility, along with Twin River, stand to lose revenue to Massachusetts, where lawmakers approved three resort casinos. / PHOTO COURTESY NEWPORT GRAND/ANDREA HANSEN
WORTH THE RISK? While Newport Grand Slots has expanded in recent years to include virtual table games, the facility, along with Twin River, stand to lose revenue to Massachusetts, where lawmakers approved three resort casinos. / PHOTO COURTESY NEWPORT GRAND/ANDREA HANSEN

The threat of new tourist-snatching resort casinos just across the Massachusetts border has grabbed the attention of Newport’s hospitality industry, which is already showing support for expanded gambling at the vulnerable Newport Grand Slots.
“Before Mohegan Sun and Foxwoods, Newport was the queen of New England resorts – Newport’s market share was premium – but for 15 years Foxwoods and Mohegan Sun have developed into destination resorts themselves.” said Evan Smith, executive director of the Newport and Bristol County Convention and Visitor’s Bureau. “Yes, we are very concerned about more casinos opening like that in Massachusetts. Those types of casinos will be direct competitors for us in the resort and entertainment business.”
Newport County Chamber of Commerce Executive Director Jody Sullivan called the potential economic blow from Massachusetts casinos “very serious,” to both the state and Newport from the potential loss of tax revenue alone.
“It is very troubling and we have to look at our options,” Sullivan said.
Since Massachusetts lawmakers last fall approved the creation of three resort casinos, including one in the southeastern part of the state, Rhode Island leaders have been scrambling to find ways to account for what is expected to be a massive loss of business and tax revenue from the Ocean State’s two existing slot parlors. A state-commissioned study by Christensen Capital Advisors estimated an annual loss of more than $100 million in taxes to Rhode Island from fully built-out gambling in Massachusetts.
Sensing trouble on the horizon, the larger of the two slot houses, Twin River in Lincoln, last year asked the state for permission to expand to full table-game gambling and was granted a voter referendum on the issue in November’s state ballot.
In the past, Newport leaders, including Senate President Teresa Paiva Weed, D-Newport, have resisted expanded gambling in the city and the family-run Newport Grand, a converted jai alai fronton, did not join Twin River in seeking table games last year. But all that changed when Massachusetts approved its casino plan in November.
“We are … faced with a daunting challenge which threatens the ability of Newport Grand to survive,” said Diane Hurley, CEO of Newport Grand in a January letter to the Newport City Council asking for a vote to join Twin River on a fall table-games referendum. “With the recent approval in Massachusetts to construct a destination resort casino in the Fall River area we have come to the conclusion that we cannot financially survive as presently constituted.”
According to Hurley, the loss of Newport Grand would cost the city of Newport 200 jobs, $900,000 in annual taxes and $7.85 million in additional economic activity through payments to vendors.
“A destination resort casino on Newport’s doorstep which offers a greater variety of gaming options, hotels, entertainment and restaurants is a frightening scenario for us,” Hurley said. “This scenario should also cause concern to our own tourism industry, as a destination resort casino just a short drive away will challenge our local hotels, restaurants and attractions with a very competitive product.”
While the location of Massachusetts’ new gambling houses will only be determined after a competitive bidding process, the Christiansen report predicted the most likely scenario would have the closest casino in Middleboro, with others in East Boston and western or central Massachusetts. The Massachusetts plan also calls for one “racino,” slot parlor which will most likely be at Plainridge Race Course in Plainville, Mass.
The “worst-case scenario” Christiansen identified for Rhode Island would be for slots in Plainville and full casinos in New Bedford and the Patriot Place complex in Foxboro, Mass.
While Newport’s primary overnight tourist business pegged to the ocean, mansions and restaurants is generally separate from the day-trip customers who frequent Newport Grand, Smith at the Convention and Visitor’s Bureau said the loss of gambling would narrow the area’s hospitality portfolio at a time when most are looking to diversify. With a large entertainment infrastructure already in place, Smith said gambling was one of the few tourism-related areas Rhode Island could expand.
“The bottom line for me personally is, if you are going to do gaming, do it right,” Smith said. “We have one foot in the game, but if you are going to do it you have to get both feet in and be totally committed. You can’t do it half speed, you have to do it full speed. I think it is important for Rhode Island to get into gaming before it is too late.”
The Newport City Council recently voted to seek a referendum for expanded gambling at Newport Grand. Now the question goes to the General Assembly and if state lawmakers approve the measure, it would need to be approved in a November statewide ballot as well as by a majority of Newport voters.
“In a very broad way, the Newport brand is still strong and is able to compete with most other attractions,” Newport Mayor Stephen C. Waluk said. “However, if it is an attractive resort casino in Massachusetts, if someone was thinking of an overnight trip to Newport, maybe it would take some business away.”
At the Chamber, Sullivan is not as concerned about a $500 million casino in Massachusetts taking away tourists from the mansions, restaurants and hotels as she is about the potential loss of tax revenue from Newport Grand.
Still, while noting that her board has not taken a position on the issue of allowing table games at Newport Grand yet, Sullivan said momentum in the community has definitely grown for giving the 36-year-old slot parlor expanded gambling.
“I think with the landscape of our economy and creation of competition so close in Massachusetts, the atmosphere might be more accepting now,” she said. “Like it or not, it is a big impact on a state that is struggling.” •

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