September 3, 2014
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Where’s the plan to counter Massachusetts casinos?
John Hazen White, Jr.

Rhode Island leaders need to come up with a plan to deal with the long-term future of Twin River and Newport Grand, the state’s two sanctioned gambling venues. Unfortunately, coming up with plans, even ones to stave off eventual crises, is not state government’s strongest suit. Whether it is what to do with Quonset Point’s port and airfield or an unsustainable pension situation, state leaders have had a hard time even acknowledging a problem, never mind coming up with a plan to deal with it before it blows up. And the future of Twin River and Newport Grand could very well be the next example of time lost and opportunities slipping away.

That’s because Massachusetts is now in the gambling game with two of three planned destination casinos plus a slot parlor coming to zip codes close to Rhode Island. This comes as no surprise, as the Bay State has been preparing for its move into gaming facilities for several years now. And during that time, what has the Ocean State done in response? Finally, come the November election, we voters will decide whether or not the state can add table games at both of our venues.

I don’t believe for a fraction of the time it takes to place a table bet that voters will not approve the referendum question. That’s not the point, however, because that vote comes two years later than it should have happened, and more importantly, adding table games is simply a way of staying competitive – and getting a short-lived head start on Massachusetts – when it comes to capturing additional gambling revenue. Once Massachusetts’ three casinos are up and running, goodbye to a lot of the annual revenue from gambling that this state needs to survive. Worse, a slots parlor at the Plainridge Racecourse in nearby Plainville could be stealing money from Twin River within a year’s time.

A recent UMass study estimated that more than half of the people who visit Twin River each year come from Massachusetts. Southeastern Mass. residents obviously patronize Newport Grand in significant numbers. Taken together, losing most of those gamblers and their losing dollars translates into cited numbers ranging from $80 million to $100 million a year in revenue this state depends on. (Last year, Rhode Island received $300 million in revenue from the two facilities, based on 61 cents from every losing dollar waged on slots.) When Massachusetts has a brand new super-casino in Boston, a second one in Taunton, and a slots parlor in Plainridge, as is likely the case, how many Bay State gamblers will continue to cross the state line to gamble in our facilities?

In anticipation of the vote to approve the addition of table games at both Twin River and Newport Grand, the facilities’ spokespeople, along with state officials and legislators, have been crowing about the anticipated revenue gains – $26 million a year is the estimate. That’s all well and good and will help Rhode Island with its perpetual structural deficit problem (annual deficits could get up well past $200 million in just a few years), but like gambler’s luck, it’s a pipe dream. In the end, the house wins; in this case, Massachusetts wins and Rhode Island loses. Even Massachusetts is probably going to suffer reverses at some point when one of its casinos goes belly-up, which could well happen (it’s called market over-saturation).

But for now, we get the table games and the extra $26 million and Massachusetts hasn’t even put a shovel in the ground. Once it does, however, the countdown begins. That’s why our leaders need to consider the end game without waiting until it’s upon us like Armageddon. Start by acknowledging that we have a window of time to prepare for certain losses in annual revenue from our two facilities and develop a plan to deal with that eventuality. Either learn to live without $100 million a year from gambling revenue lost to Massachusetts or find other ways to replace that amount with (A) a positive idea: economic development and regional consolidation to cut costs and spur new tax revenues or (B) a negative one: none of that, just new taxes.

The clock is ticking. There’s not much time to waste.


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