The Rhode Island lawmakers have passed a gambling deal, promising more revenue for the state by creating a joint venture between its two partners – IGT and Bally’s Corporation. Both entities have been at odds, with Bally’s having more reasons to complain.
The state’s General Assembly voted 28-7 to approve a new 20-year contract, extending IGT’s role as lottery technology provider. The same legislative measure also allows Bally’s – the operators of the Twin River Casino in Lincoln and Tiverton Casino Hotel – a share of the slot machine market.
The proposal, which now heads to the governor’s desk, was backed by House Speaker K. Joseph Shekarchi and Senate President Dominick J. Ruggerio.
Gov. Dan McKee has already indicated his support.
The state’s lower chamber had approved the legislation last month.
The proposal extends IGT’s exclusive control of the state’s lottery until 2043. The London-based gambling company that produces slot machines and other technology pledges to keep an employee workforce of at least 1100 individuals during that time.
In addition, IGT must also complete a one-time $27 million payment to the Ocean state for the 20-year lottery extension.
For its part, Bally’s will add 30 new jobs and invest $100 million to its facility in Lincoln and will be subject to the same requirements and penalties as IGT.
Both entities must maintain headquarters in Providence through 2043.
Bally’s, which is based in Lincoln, will retain its monopoly on casino gambling in the state through 2036.
Rhode Island’s Third-Largest Industry
Shekarchi and Ruggerio said the renewed agreement represents an investment of over $250 million to enhance and preserve casino and lottery gaming, the third-largest source of revenue for the Ocean State.
Gross gaming revenue (GRR) at the two Bally’s casinos is levied at 74%, and the state received $293.9 million from the Rhode Island Lottery in the 2020 fiscal year, which was nearly $400 million a year before when there was no pandemic.
The two lawmakers who championed the bill hailed the amended version’s lucrative aspects.
Shekarchi said the bill increases revenue to the state and preserves critical jobs, and said the lower chamber took several steps to enhance the legislation on behalf of the taxpayers.
Ruggerio said the senate committee after a careful review developed legislation that protects over 1000 jobs, besides guaranteeing significant capital investment.
Bally-IGT, From Competitors to Partners
Under the new legislation, Bally’s and IGT will form a joint venture, with IGT having a 60% controlling stake, and Twin River having the rest of the 40%. The new company – a licensed VLT provider – will be responsible for supplying all of the gaming machines to the casinos.
The law also requires that at least 6% of the VLTs be replaced each year for new ones, and state officials to review underperforming terminals and decide whether to replace or modify them.
The Rhode Island Division of Lotteries will maintain its statewide regulatory role concerning gaming.
How Have We Reached Here?
Rhode Island approved commercial casino gambling in 1992 at the state’s two pari-mutuel wagering venues. But only video lottery terminals (VLTs) were allowed.
In 2018, IGT was chosen by the Rhode Island Lottery as its operator. The company gained rights to place its own machines inside the casinos. According to law, each casino must allow IGT to operate up to 50% of the gaming devices.
Twin River Worldwide Holdings acquired Bally’s brand from Caesars Entertainment last year and rebranded it as Bally’s. The casino company operates Twin River in Lincoln and the Tiverton Casino Hotel.
Until recently, Bally’s had been resenting the state’s contract with the IGT that allows it to control the company’s casino floors.