PROVIDENCE — The first of several public hearings on the proposed extension of a contract for International Game Technology LLC started Thursday afternoon, with an overview of state purchasing law, the operations of the R.I. Lottery and a promise from the Senate Finance Committee chairman for a thorough review.
The initial hearing focused on context — with state revenue attorneys providing an overview of state procurement law and how the proposed contract extension for IGT fits into that. Since 2003, the now- United Kingdom-based company has had the state contract to provide technology for lottery services, which includes the machines at both of the two casinos.
The proposed 20-year extension of that contract, under terms negotiated by the administration of Gov. Gina M. Raimondo, became controversial soon after the announcement, because Twin River Management Group, which owns the casinos, criticized it as a no-bid, secret deal that was not a good deal for taxpayers.
Proponents have argued that a continuing contract with IGT is a better deal for the state than any alternative, because it requires the company to maintain 1,100 positions in Rhode Island. The company has its North American headquarters in a Providence building built for it.
Marilyn McConaghy, who is head of legal services for the R.I. Department of Revenue, told the senators that she was unaware of any other contract for lottery services that included a requirement for economic-development terms.
The R.I. Lottery oversees collection of $4.3 billion in wagers and ticket sales on behalf of the state, said Mark Furcolo, director of the R.I. Department of Revenue. It represents the state’s third-largest revenue source annually.
“This evening, we look forward to providing you with the facts,” he told senators. “What we haven’t done is negotiate a no-bid contract. If the legislature ultimately gives us the authority we will negotiate a contract with IGT, subject to the terms of the law the legislature passes. Or we will go out to bid.”
The process before the Senate now, he said, is more transparent than a bid. After bids are evaluated, the negotiations on a contract could take several months, he said.
Kelly McElroy, legal counsel for the Senate finance committee, provided an overview of state procurement law.
In specialized circumstances, she said, the General Assembly can authorize a state agency to go outside the typical bid procedure spelled out in state law.
“You are making sure that certain limitations and safeguards” are put into contracts for the benefit of the public, she told senators.
In Rhode Island, on four previous occasions, the state has authorized enabling legislation for contracts relating to the R.I. Lottery. The current contract with IGT was authorized in 2003.
Additional hearings, potentially as many as three, will be held by the Senate finance committee as it continues the legislative review of the proposal. The House finance committee is also expected to hold hearings on the contract, starting next week.
Mary MacDonald is a staff writer for the PBN. Contact her at macdonald@pbn.com.
