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Gambling bill gets amended

June 22, 2011

PROVIDENCE — A new wrinkle has been added at the last minute to a bill that would allow Lincoln's Twin River to operate casino table games. The facility wants the authorization to conduct online gambling, if the federal government passes a law to allow it.
That is one of several changes to a bill introduced by Pawtucket Rep. William San Bento that the House Finance Committee held for further study on Tuesday but which committee Chairman Helio Melo of East Providence suggested could become part of the 2012 budget the House plans to pass on Friday.
Robert Carr, attorney for the finance committee, explained to members that one of the changes to the bill is added language that, “it is in the best interest of the state” to enact legislation to determine the terms and conditions of how casino gambling would be conducted at Twin River, including what the state's share of revenue from the table games will be during the 2012 legislative session, before a referendum question is put to the voters on whether to allow the expansion of gambling. According to the state constitution, referendum questions must be approved by voters statewide and in the host community of Lincoln before there can be any expansion of gambling beyond what currently exists.
The idea of that, said Craig Eaton, Twin River's senior vice president and general counsel, is that “the deal will be laid out,” before voters make a decision on allowing Twin River to become a full casino with offerings like poker, craps, roulette, blackjack, big six or pai gow. Newport Grand is not seeking to offer table games.
Other language added to the bill would allow both Twin River and Newport Grand to increase the “promotional points,” essentially free play provided to frequent customers, by $750,000; would require the state to pay a share of Newport Grand's promotional costs even though the slot parlor did not meet performance goals required by previous legislation, and would have the state pay a share of the cost of bringing in new, high-end machines featuring, in Melo's words, “the latest technology.” That technology would include premium or licensed proprietary content, perhaps based on the latest hit movies, TV shows or other pop-culture merchandising elements. It would also include machines with 3D graphics, unique math/game play features. The bill proposes that the state pay two-thirds if the increased price of those machines and the facilities one-third, if the Division of State Lottery, which operates both facilities, determines the machines will bring in additional revenue.
Eaton explained that such games, which are a fixture at places like Foxwoods and Mohegan Sun are more expensive and because in Rhode Island the technology providers are paid on a percentage of net terminal income, it doesn't make sense from a business perspective to offer them here.
Promotional points, Eaton said, “have been a success story for the state” as well as the two gambling facilities. The language in the bill, he said, would give the Division of Lottery “wiggle room” to approve extra points “if it makes sense from a business perspective.”
In order for Newport Grand to qualify for the state to reimburse it for a share of its promotional costs, the facility in 2011 would have to meet or exceed the net terminal income from 2010, Newport Grand lobbyist Christopher Boyle, a former state representative, acknowledged that they are not going to achieve that goal this year. The provision in the bill would be retroactive, so the state would have to give Newport Grand additional money for the fiscal year that ends June 30 as well as the new year that begins July 1. Boyle estimated the change would have the state pay Newport Grand an additional $163,000 in the current budget year.
While online gaming has not yet been made legal by the Congress, Eaton said “there is a lot of noise” indicating that it could become legal in the foreseeable future. “It makes competitive sense to add that to what would be voted on in the referendum,” Eaton told the panel, “to have it approved and be another tool in the toolbox if it is approved federally so that Rhode Island can offer it.”
Eaton noted that, like the rest of the gabling at Twin River, it would be subject to the control of the Division of Lottery and legislation on tax rate. “It's not like carte blanche would be given to the facility.”
If Twin River became involved in online gaming, Eaton said, gamblers would be able to log on to Twin River's website and choose to play poker, slots or other games online.
Eaton said Rhode Island would have to approve online gaming if the federal government allows it and because the constitution requires a referendum vote before there can be an expansion of gambling in Rhode Island, and also requires it be operated by the state, it could only be done at a Division of Lottery operated facility.
“We think online gaming could be big, so we are trying to stay ahead of the curve,” Eaton said. “It could be nothing, or it could be something that we are looking back at in two or three years, saying 'Why didn't we do this?”


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