IGT, Twin River reach truce, announce planned partnership

Posted

The battle over the state’s gaming future has ended – at least on one front.

IGT and Twin River last week announced a truce in their long-running dispute over Rhode Island’s lottery contract, presenting plans to create a new joint entity and expand Lincoln’s Twin River Casino Hotel.

The arrangement would leave intact most parameters of the proposed 20-year, multibillion-dollar contract extension for IGT, which initially spurred the conflict between the two local gaming giants. What remains to be seen is whether lawmakers skeptical of the no-bid pact will be moved by the détente.

Gov. Gina Raimondo – who has championed the IGT extension – struck a note of caution, saying she will review the planned arrangement between IGT and Twin River.

“It’s clearly better for Twin River…I have to make sure it’s just as good or better for taxpayers,” she told members of the media at the State House.

A central component of the new agreement, according to a press release from IGT and Twin River, is the “creation of a new company that will focus on creating and maintaining a competitive gaming machine offering.” It would be established as of Jan. 1, 2022, with IGT controlling a 60 percent stake and Twin River holding the remaining 40 percent of the venture.

The jointly held company, according to the release, will be a licensed video lottery terminal, or VLT, provider. It would supply all gaming machines used at the state’s casinos. Additionally, Twin River would seek licensing as a technology provider and acquire roughly a quarter of the slot floor from current third-party vendors.

The other most significant aspect of the arrangement involves a planned 18-month renovation and expansion project at Twin River Hotel Casino. According to the release from the companies, the project would add 40,000 square feet to the casino’s first-floor gaming area, create a 14,000-square-foot spa in the hotel, create greater barriers between the casino’s smoking and non-smoking areas and remove most of the second-floor slot machines in anticipation of a “new entertainment concept” that has yet to be formally announced.

“The combined improvement and expansion in Lincoln along with additional technology investments will exceed $100 million,” the release reads.”

As part of the announcement, Twin River committed to the creation of a 12,000-square-foot headquarters in Providence. The company is currently leasing space on Westminster Street, while the release states that “various locations are being explored” for the new base of operations.

During last week’s press conference, executives from both IGT and Twin River downplayed any lingering tensions from the intense public battle the companies engaged in during the past year.

“We don’t look back with any regrets as to what we did. We did what we did. We thought that was in the best interest of the company, and now we think this very much is in the best interest of our employees going forward,” Robert K. Vincent, chairman of IGT Global Corp., said during a press conference announcing the new agreement last week.

“It became very clear to us that the state wanted to continue with IGT,” Marc Crisafulli, executive vice president of Twin River Worldwide Holdings Inc., said during the press event.

He added: “There was the effect of competition in the fall to forge this new partnership that works. It’s not one company, it’s two people that have a voice in that company,”

Attention will now turn back to the General Assembly, where a number of key lawmakers have been skeptical of the IGT contract.

A recent report from independent consultant Christiansen Capital Advisors raised concerns regarding the contract agreement. The report – which was commissioned by House Speaker Nicholas Mattiello at the request of the chamber’s Republican caucus – called for the agreement to carry a 10-year term with optional extensions.

Gambling represents the state’s third-largest revenue source and a major source of employment in the Ocean State. The IGT agreement has been touted as a means to preserve more than $300 million in annual revenue and keep the company’s roughly 1,100 in the state.

Executives from both IGT and Twin River credited Senate Dominick J. Ruggerio with bringing the two sides together for talks.

“I am pleased that these two valued Rhode Island companies came together to work in partnership for the mutual benefit of both companies and, most importantly, all Rhode Islanders,” Ruggerio said in the press release. “The state’s taxpayers will be the ultimate beneficiaries of a successful economic development partnership that maintains good jobs while protecting and hopefully enhancing an important state revenue stream. The Senate Finance Committee will be doing its due diligence on the proposal in the coming weeks.”

Mattiello added: “I am first and foremost pleased that our two partners most responsible for our critical gaming revenues have opted to put the needs of the taxpayers before their own. I am also pleased that the proposed plan protects the 1,100 existing IGT jobs – that has always been one of my main concerns. With that said, the House will have a full and thorough public review of this proposal and attendant legislation.”

Steve Frias, the state’s Republican National Committeeman and a former candidate for state representative, said in a statement that the agreement between IGT and Twin River has not changed his perspective on the 20-year contract proposal.

“As we have learned over the last few months from Twin River and others, IGT’s twenty-year billion-dollar no-bid contract is a bad deal for taxpayers,” he wrote in an email. “This deal does not automatically become a good one for taxpayers because IGT and Twin River will now be business partners. As shown by the recent report by Christiansen Capital Advisors to the House of Representatives, a competitive bid process is the best way to ensure taxpayers get the best price. This deal may now be good for both IGT and Twin River, but it remains a risky deal for taxpayers because we will be locking ourselves into a no-bid contract affecting our third largest source of revenue for the next twenty years. If the General Assembly approves this deal, they will be engaging in fiscal malpractice.”

Comments

1 comment on this story | Please log in to comment by clicking here
Please log in or register to add your comment
Robert

Who legalized gaming in RI? Just another way to bankrupt these fools.

Tuesday, February 4