New contract proposal would keep IGT in Providence through 2043

INTERNATIONAL GAME TECHNOLOGY would retain its U.S.-based operations in Providence through June 2043 under a new agreement proposed by state officials. / PBN FILE PHOTO/CHRIS BERGENHEIM

PROVIDENCE – Gov. Gina M. Raimondo and legislative leaders announced Thursday a new deal to keep the U.S. operations of International Game Technology PLC headquartered in Providence through June 2043.

The proposal, codified in legislation introduced Thursday, would extend the company’s agreement to run the state lottery through June 2043.

Announced late Thursday, as the 2019 General Assembly session is winding down, 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.

House Speaker Nicholas A. Mattiello, D-Cranston, and Senate President Dominick J. Ruggerio, D-Providence, said the legislation containing the contract will be available for public review over the next several months.

- Advertisement -

The General Assembly will return for a special session in the fall to analyze the bill, Ruggerio said. The date has not been set.

The company, which is publicly traded, employs 1,000 people in Rhode Island, one of the state’s largest public employers.

The terms of the agreement will require the company to keep at least 1,100 permanent jobs in the state, according to a news release issued by the governor’s office.

In exchange, 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 above $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 over $1 billion generate 2.5% in commissions for IGT.

At the time of the original contract, the sales commissions were expected to generate about $700 million for the company over the length of the contract. It wasn’t immediately clear Thursday what the actual payments totaled.

In a statement, Robert Vincent, the company’s chairman, said the agreement is the result of several months of negotiations.

“IGT’s partnership with the state has been beneficial for both parties,” he said. “We appreciate the governor’s submission and support of this legislation and look forward to working with the General Assembly toward passage.”

Agreement provisions include:

  • IGT will maintain its corporate lottery office at 10 Memorial Blvd. in downtown Providence.
  • IGT will install a new online lottery and bring its iLottery products to Rhode Island.
  • The company will replace more than 900 terminals with new machines at Twin River Casino Hotel in Lincoln by the end of 2020 and will replace at least 6% of the poorest-performing machines annually.
  • Instant ticket prices will remain the same through the life of the contract.

Thursday evening Twin River Worldwide Holdings Inc. issued a statement questioning the nature of the agreement.

“We question the timing of this no-bid, billion dollar, 20-year contract. 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,” said company spokesperson Patti Doyle. “If this contract was competitively bid, we believe the upfront payment amount to the State for these gaming rights would exceed $100 million dollars. Without a doubt, this contract strays far beyond industry norms.”

“As the State’s operating partner in gaming, Twin River owes the people of Rhode Island its best performance and its best advice,” Doyle concluded.

Mary MacDonald is a staff writer for the PBN. Contact her at macdonald@pbn.com.

No posts to display