PROVIDENCE – In a report released Monday, International Game Technology PLC said that its value to the state gross domestic product in Rhode Island in 2019 will be $329 million.
The report comes after competing bids between IGT and Twin River Worldwide Holdings Inc. to operate table games at Rhode Island’s and provide video lottery terminals at Twin River casinos in the state. IGT’s current master contract for gaming and lottery services to Rhode Island ends in 2023, with the new contract beginning in 2023.
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The agreement with IGT has been opposed by Twin River, with company spokeswoman Patti Doyle saying at the deal’s announcement “to give one gaming company monopoly control of the machines on the casino floor is unprecedented in the industry and is significantly harming Rhode Island taxpayers.”
For its part, Twin River also made a bid for the contract, offering $125 million in cash to take the state’s lottery contracts with IGT.
Terms of the IGT deal negotiated with the R.I governor’s office:
- IGT will maintain a minimum of 1,100 jobs in Rhode Island, 100 more than the company currently has in the state.
- IGT will be paid by the state a percentage of lottery sales annually. The specific formula for online and instant tickets: 5% of sales up to $250 million; 4% of sales between $275 million and $400 million; 5% of sales greater than $400 million.
- Of these, the mid-tier represents a percentage increase. The current contract, reached in May 2003, provides IGT with 1% of sales between $275 million and $400 million.
- The percentage for video lottery commissions for the company hasn’t changed under the proposed contract. It would be 2.5% of sales up to $500 million and 1% of sales between $500 million and $1 billion. Sales greater than $1 billion generate 2.5% in commissions for IGT.
- The agreement would require IGT to pay $25 million to the state and invest $150 million in capital improvements to the lottery system over the length of the contract.
Economic impact:
IGT said that the company’s employees in the state will generate $111.3 million in labor income in 2019 in the Ocean State. Including indirect jobs, the company said that it will have supported $176.1 million in labor income earnings for the year (for a total of 2,445 jobs).
IGT said that its analysis was prepared by Edinaldo Tebaldi, professor of economics at Bryant University with IMPLAN, an economic impact assessment software model, at the request of IGT.
The company said that its employment would result in $25.9 million in tax revenue for state and local governments, including $11.2 million in sales tax, $6.8 million in commercial, industrial and residential property taxes, $5.4 million in personal income tax, $0.8 million in corporate taxes, and $1.7 million in other state and local taxes and fees.
The company said that it will maintain 1,100 jobs in the state, but said that employment numbers may increase over the course of a potential contract extension, which be from 2023 through 2043.
“The basis of our economic development agreement with the state is to preserve and grow IGT’s high-paying, technology-sector jobs and the impact those jobs have on the local economy. This analysis details the significant boost IGT’s operations give to Rhode Island’s economy,” said Robert Vincent, chairman of IGT Global Solutions Corp., in a statement. “One of the fundamental points of the review of this agreement is to understand and appreciate the ripple effect IGT produces beyond the economic benefits of our operations.”
Twin River said that its bid deal to give the company total control over gaming machines in the state would be “unprecedented.” Twin River spokeswoman Doyle said that the company’s bid for the gaming and lottery contract would be in partnership with a consortium of businesses but decline to identify any of those companies.
Doyle added that Twin River continues to call on the state to follow an open-bid process for the contract.
