Rhode Island long ago made its bet on gaming revenue flowing indefinitely into state coffers. That leaves state leaders with little choice but to believe Bally’s Corp. and International Game Technology PLC that a buyout of the former and a partial sale of the latter won’t hurt the Ocean State.
If the two deals – announced within a month of each other – are approved, a hedge fund will control Bally’s, which employs about 1,600 in the state. A private equity firm will take over the digital gaming business of IGT, which employs about 1,000 in R.I.
There’s no immediate cause for concern. State regulators believe Rhode Island is protected from attempts by either company to cut jobs locally by a 20-year contract the state signed with both in 2021. The deal requires both companies to maintain jobs and headquarters in Rhode Island.
IGT now is 114 jobs below its 1,100-job target, leaving it subject to potential fines. The company says it will meet that job requirement.
Longer term, however, Rhode Island’s significant financial interests in the two companies will be more tied than ever to the whims of out-of-state investors. And in a gaming industry downturn, Rhode Island’s budgetary dependence on the industry will not be their first priority.
“They are not in this to lose money,” reminded Providence College business professor Patrick Kelly in this week’s cover story.
What should Rhode Island leaders do? To borrow from a Russian proverb, trust in the companies’ intentions, but verify with close legislative and regulatory scrutiny.