Twin River can wait on expansion

With Massachusetts leaders again considering casinos in the Bay State, the owners of Twin River say they’re open to waiting another 1 1/2 years to put the question of casino gaming before Rhode Island voters.
A spokeswoman for the Lincoln video-slot parlor said the urgency remains to offer card and table games as quickly as possible to stave off competition from potential Massachusetts gaming facilities, but getting a casino question on a special ballot this November might not be the best option.
Twin River wants to “work with politicians on what the best course is,” spokeswoman Patti Doyle said.
“It’s being realistic,” Doyle told Providence Business News last week. “We see there are some challenges [to seeking a ballot question this year], and we have to balance those challenges against the threat of Massachusetts, which we continue to think is real.”
Those “challenges” include reluctance on the part of Gov. Lincoln D. Chafee and others to hold a special election in November for voters statewide to decide whether table games should be allowed at the former dog track, which now houses 4,750 video lottery terminals.
“The governor believes an issue with the significance of gambling should not be put before the voters in an off-year election, where turnout is historically lower,” said Chafee spokesman Michael Trainor.
Questions about the timing of a possible referendum ballot arose earlier this month after a Senate committee took up two casino-related bills – one that put the issue of table games at Twin River before voters this year, and another that would do it during the general elections in November 2012.
George Nee, president of the Rhode Island AFL-CIO, reportedly urged lawmakers on the Committee on Special Legislation to consider putting the casino question on the ballot this year to counter Massachusetts’ efforts to take a casino vote, possibly next month.
The Senate committee held both measures for further study.
Missing from nearly all the legislative discussion on gaming expansion has been the state’s other video-slot site, Newport Grand. Newport officials who oppose table games at the former fronton threatened last year to sue if the state attempted to require a local ballot referendum on table games. In contrast, Lincoln town officials have been more supportive of expansion at Twin River, and the slot parlor has been more aggressive in pushing for full-fledged casino capabilities, saying it would make them more able to ward off competition from out of state.
While talks in Massachusetts to approve casino gambling collapsed last year, House Speaker Robert DeLeo said publicly earlier this month that he hopes a casino bill will pass in July.
There is a lot at stake. Twin River’s video-lottery terminals have generated $403.66 million in fiscal 2011, which started in July 2010.
With the state’s take at 61 percent, about $246.23 million has been pumped into the state coffers this fiscal year. By comparison, Newport Grand’s VLTs have brought in $46.28 million, with about $28.23 million going to the state.
To make their case for expanded gaming, Twin River commissioned a study that found adding a full complement of 125 table game would mean adding 617 jobs at the facility, and hundreds more jobs at related businesses.
The study, conducted by Twin River consultant The Innovation Group, also concluded that the tables would bring in $103 million in revenue for 2013, and would boost customer use of the VLTs and increase revenue further.
The consultant estimated that, if Massachusetts were to add casinos and slot parlors, the competition would be devastating. The state’s take from the Twin River VLTs would shrink from an estimated $276.1 million in 2013 to $201.4 million, the consultant said.
The Chafee administration wants to take an independent look.
Administration officials are seeking a consultant of their own to conduct several “impact studies” that will, among other things, look at competitive threats to both Twin River and Newport Grand from state licensed casinos and “racinos” in Massachusetts, as well as future Indian-run casinos within 50 miles of Lincoln.
Previously, Chafee had made it clear he would like to get the Narragansett Indian Tribe involved in discussions of expanding gaming at Twin River. “We wanted more due diligence before the governor works on setting the state’s gaming policy,” said Claire Richards, Chafee’s legal counsel. Although the Twin River owners have insisted they have no plans for a hotel, the administration is insisting a vendor examine the effects on the Providence and Newport markets of a hotel and expanded convention facilities at Twin River.
Paul McGreevy, director of the R.I. Department of Business Regulation, who also helped draft the request for proposals, expects the winning vendor to complete the work within 60 days – probably in September – after getting the contract.
Other details of a possible gaming expansion remain up in the air, such as whether the state would create a casino license, how much the state would divert from the new revenue stream, and which government authorities would oversee casino operations.
One of the bills discussed earlier this month at the Senate Committee on Special Legislation addressed these questions and called for a special election in November.
If an expansion of gambling were to be approved by voters, the bill, sponsored by Sen. Frank A. Ciccone III, D-Providence, would set up a five-member gaming commission that would issue a casino license to the “highest responsible, qualified bidder.”
Because Twin River is throwing off so much cash, it has been brought up as a possible solution to close the state’s $6.8 billion unfunded pension liability, at least by one stakeholder.
Robert Walsh, executive director of the National Education Association Rhode Island, has suggested the state should sell most of its interest in VLT revenue, sinking what could be a more than $3 billion payoff into the pension fund, where it could be invested and keep the system afloat without hefty yearly contributions.
For their part, the Twin River owners – led by financial giant Wells Fargo and Sankaty Advisors LLC, a $20 billion Boston-based investment fund manager – say they aren’t interested in selling.
“At the end of the day, we really need to stay focused on the course we’ve charted for ourselves, which is to pursue a table-game referendum,” Doyle said. &#8226