In Rhode Island and casino operator Twin River Worldwide Holdings Incorporated has reportedly criticized a proposal that would see International Game Technology (IGT) awarded with a 20-year contract to supply an even greater share of the small jurisdiction’s estate of electronic gaming machines.
According to a Sunday report from The Providence Journal newspaper, the new no-bid deal was floated by Rhode Island Governor Gina Raimondo late last week and would see IGT provide some 85% of the over 5,000 electronic gambling machines operated by casinos in the eastern state. This purportedly represents a 35% bump from the current agreement, which is due to expire in 2023, but does include the provision of a $25 million upfront payment.
At the same time, the newspaper reported that the proposed contract would furthermore see IGT continue to handle the Rhode Island Lottery’s central operating systems in exchange for being paid approximately $12.5 million every year.
The Providence Journal reported that Twin River Worldwide Holdings Incorporated, which runs Rhode Island’s Twin River Casino Hotel as well as its Tiverton Casino Hotel, paid for a full-page ad to contend that the proposed deal does not represent good value for money. The casino firm’s Executive Vice-President, Marc Crisafulli, purportedly detailed that his firm will also be launching an opposition campaign in hopes of persuading legislators not to okay the controversial contract at an upcoming special session.
Crisafulli reportedly told the newspaper…
“We think Rhode Island taxpayers should be terrified by this deal. The big concern is what is happening with the regional market right now. There are three new facilities in Massachusetts over the last couple of years. There’s the prospect of a fourth [along with] the prospect of a third facility in Connecticut. We are facing intense competition. Not only does this deal not help us to compete. It’s a burden that makes us less competitive.”
Twin River Worldwide Holdings Incorporated reportedly told The Providence Journal that the machines from IGT had netted around $258 in daily average revenues over the course of the past year. But, the operator purportedly explained that this result had been topped by units from Everi Holdings Incorporated and Scientific Games Corporation, which had averaged $303 and $401 respectively, and means that the state could be at risk of losing out on up to $31,000 in tax revenues annually from every IGT machine it operates.
Regarding the running of the Rhode Island Lottery’s central operating systems, Crisafulli reportedly told the newspaper that IGT recently inked a ten-year deal with the lottery in neighboring Massachusetts that saw it paid a one-time fee of around $23 million.
Crisafulli reportedly told The Providence Journal…
“And on the systems side, the state is overpaying IGT at least $300 million over the 20-year extension. Essentially, the state of Rhode Island is paying five times what Massachusetts is paying for the same or at least a very similar system.”
In response to the criticism from Twin River Worldwide Holdings Incorporated, Robert Vincent, Chairman for IGT, reportedly told the newspaper that the proposed deal should not be distilled down to simply ‘a no-bid contract for so many years’ as it contains ‘an economic development’ element that includes a pledge that his firm will protect the jobs of the around 1,100 people it employs in the state. He moreover purportedly proclaimed that the contract would secure his firm’s presence in downtown Providence while giving the state ‘the ability to pitch us on any expansion plans we have going forward’.
Josh Block, a spokesperson for Governor Raimondo, reportedly agreed with this sentiment by declaring that the planned contract ‘will result in hundreds of millions in local investment and jobs for 1,100 Rhode Islanders’ featuring an average salary of around $100,000.
Block reportedly told The Providence Journal…
“IGT is one of only three companies in the world, and the only company in Rhode Island, capable of operating this system and this agreement ensures Rhode Island employees will be guaranteed jobs for decades to come.”