The unfolding story over the no-bid contract extension with International Game Technology PLC for supplying technology and services to the state’s lottery system has gripped Rhode Island’s attention.
Gov. Gina M. Raimondo is emphasizing jobs. In return for the long-term extension of the IGT contract – through June 2043 – the company would pledge to keep 1,100 people and its United States headquarters in Rhode Island.
In a recent opinion article that her staff supplied to PBN, she said: “Earlier this year, IGT officials came to my office. … They love Rhode Island, they said, and don’t want to leave. But with their R.I. Lottery contract expiring … they’re thinking seriously about relocating.”
Its jobs have an average salary of $100,000, nearly twice the state median household income. Raimondo does not want to lose those jobs.
The renewal contains a variety of financial provisions, ones that benefit both the state and IGT. But Twin River Worldwide Holdings Inc., which operates the state’s two casinos, stands in opposition to the deal.
In a letter sent July 18 to General Assembly members, the company said: “Twin River offered to guarantee 1,000 jobs and offered a $125 million upfront payment [should IGT leave the state] and committed to delivering all of the required services through partnering with IGT’s competitors.”
But should Twin River be allowed to manage the state’s two casinos and supply the technology and services they use, even though in the end it is the state, through R.I. Lottery, that controls the operations?
Wendy Schiller, a professor of political science at Brown University, said the no-bid nature of the agreement has been the focus of the conversation, not what is better for jobs in Rhode Island, and what is better for controlling or accounting for the revenue from gambling.
“There is no review here over a generation,” she said. “And 20 years is a generation. The state has relinquished all of its oversight capacity.”
Robert Vincent, chairman of IGT Global Solutions Corp. and head of North American operations for IGT, says that the 20-year length of the contract has become the industry standard.
“States do not want to put the up-front capital to build out the infrastructure. … They say, you put up all the capital” – including updates – which then must be recouped over a long period, Vincent said.
John Marion, executive director of Common Cause Rhode Island, noted the governor has said the state can’t use a bid process to require jobs.
“But she makes the assumption that it’s OK for a company to essentially hold us hostage for these jobs.”
Rep. Brian Newberry, R-North Smithfield, the former House minority leader, said he’s opposed to a 20-year agreement, without a bid, with any company.
Does he have similar concerns about Twin River controlling both casinos and their underlying technology?
“To me, it’s not about the particular company. You don’t want to put so much of the state’s revenue running through one source,” he said.
Mary MacDonald is a PBN staff writer. Contact her at Macdonald@PBN.com.