A high-stakes game for RI

Posted 8/8/19

There's certainly a lot to chew on in regards to the proposed 20-year agreement between the state and gambling giant IGT - in no small part due to the extensive media campaigns that have been launched by IGT and Twin River following the announcement of

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A high-stakes game for RI


There’s certainly a lot to chew on in regards to the proposed 20-year agreement between the state and gambling giant IGT – in no small part due to the extensive media campaigns that have been launched by IGT and Twin River following the announcement of the agreement in principle this past June.

If the 90-inch story on today’s front page doesn’t delve deep enough – or if the important information gets lost within the overwhelming amount of context necessary to fairly portray all sides of the issue, as we have tried to accomplish – allow us to attempt to further clarify the positions and our interpretation of their merit in this format.

We find it somewhat troubling that IGT has decided this decision must be made now, with four years remaining on its current contract with the state, declaring in no uncertain terms that the jobs of some 1,100 people are at stake in Rhode Island if an extension is not granted. Due to this, we cannot fault Governor Gina Raimondo for wanting to act quickly and decisively in order to protect these jobs and to keep one of Rhode Island’s largest companies from packing up and bidding farewell.

The deal has brought about much conversation and criticism – some well deserved and others more dubious. No entity has been more critical than Twin River Worldwide Holdings Inc., the entity that owns the two Twin River casinos in Rhode Island and began trading publicly in March.

Twin River alleges that the deal will come at a severe cost to the state far surpassing reasonability. They argue that the contract should have been put out to a public bidding process so that other offers could be reviewed to ensure that IGT isn’t simply taking advantage of its well-established position within the state.

Unfortunately for Twin River, IGT does hold a lot of clout in this situation. In addition to being one of only three companies that offer these types of specialized services, they have their Providence headquarters well established and the jobs are already here. There is no guarantee that Twin River can replace the jobs that would be lost if IGT holds true on their intentions to leave should a contract extension not be reached. There is also no guarantee that, should a public bid be sought, another gaming entity would be able or willing to provide what IGT already provides.

To use a gauche pun – we agree that spurning IGT is a gamble, and can understand the perspective of Governor Raimondo not wanting to put a full third of the state’s revenue on the table in order to satisfy Twin River’s protests.

On the other hand, we also see elements of truth in Twin River’s argument. Giving IGT the right to continue to supply 85 percent of video lottery terminals for the two casinos is the definition of a monopoly – and monopolies are normally not the best thing to optimize revenue for a business. Stats from the lottery seem to indicate clearly that machines from IGT’s competitors do better overall than IGT machines, so perhaps this could be an area ripe for compromise.

Unfortunately, the VLT disparity is an issue Twin River probably should have raised earlier, such as back in 2015 when GTECH and IGT merged – which created the 85 percent monopoly that has, until now, gone unchallenged.

Other concerns raised – such as the notion that IGT charges inordinately higher fees for their monitoring services compared to other states where they provide these services – are more dubious. The services rendered to Massachusetts, for example, do not match the services provided to Rhode Island, as Twin River has tried to portray.

Then again, the total percentage of revenue grabbed by IGT for supplying VLT machines in Rhode Island does appear to be much higher than similar states with similarly sized gaming industries, which should be further examined.

All told, while it is troubling that such a large contract has been negotiated out of the public eye, we do find it encouraging that the proposal will have to go through a public vetting via the House Finance Committee before any finalized contract is inked and signed. These hearings should commence in either September or October, barring some unforeseen snag.

Through this process, it is our hope that the legitimate concerns raised by critics of the deal, such as those regarding comparative pricing of gaming industries in other states and other gaming companies, can be fully explored to find out if this deal is truly good for the state’s taxpayers.

It is Governor Raimondo’s prerogative to negotiate deals with large companies such as IGT in good faith, and it is the legislature’s duty to put these deals through their paces to ensure that all important questions are asked and properly investigated. We have to trust this process will occur, as there is indeed much at stake.


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The original 20 year contract with GTECH was with a wink and a nod in the good old fashioned way of doing business in RI. Of course the gaming giant IGT would want that to continue. They could easily get a better deal if they consolidated and move their business to another state. The question is why haven't they done so already. IGT was based in Nevada and did business nationally and internationally without having any base here in this state other than a local office in Quonset. They can run it from anywhere and just keep a small space open to move games in and out. Personally, I do see this as a threat. So does Gina which is why she jumped so quickly.

I think getting locked into a 20 year deal is crazy. Their games have been terrible since 2008. They only had Wheel of Fortune to their name and they haven't put in the R&D for new themes like Williams and Sci Games. GTECH did a terrible job of maintaining the VLTs and floor at Twin River and Newport Grand. The only way you could get around the maintenance contract was to either maintain the games yourself (even though you were technically paying them to do it for you) or hold a fire to their feet and they would move at a snail pace to clean them up only to not continue to maintain them. It was a terrible deal for those connected to gaming and no one wants to see it extended.

There has to be some type of middle ground in the contract negotiations. I don't think Twin River is capable of stepping in and doing a better job either. I just don't think tying yourself to something for 20 years (outside of marriage) is good for anyone.

P.S. All that money we supposedly bring in for gaming was supposed to go to education, right? How is that working out for your RI?

Thursday, August 8, 2019