RI governor may do better than an ‘insider’ gambling deal
Representatives Blake A. Filippi, Michael W. Hippendale and Brian C. Newberry
Rep. Blake A. Filippi, of R-Block Island, is the Minority Leader at Rhode Island House. Michael W. Chippendale, R-Foster, is the Minority House Whip. Representative Brian C. Newberry, R-North Smithfield, represents HoDistrict 48.
The IGT / Twin River legislation just passed by the House is a game against Rhode Island taxpayers. This “deal” exceeds these multinational corporations by $ 800 million!
While the law empowers Governor McKee to bypass public bidding laws and complete this 20-year insider deal, he is neither obligated nor should. To protect taxpayers, Governor McKee should act responsibly and negotiate a better deal.
When then-governor Raimondo announced the deal in 2019, it was strictly for IGT – and he overpaid IGT nearly $ 400 million. Twin River has spent months crying out loud, publicly denouncing the whole concept of a “no-offer deal” as unfair to taxpayers. Then suddenly IGT, Twin River and their 14 lobbyists struck an even worse deal for the taxpayers who cut Twin River into action. Today, IGT and Twin River each receive nearly $ 400 million in overpayments. Twin River even shamelessly became the loudest cheerleader in this new deal, to the point where the bill is now named after its chief negotiator.
Twin River’s $ 400 million overpayment comes from its 86.4% taken from our table game revenues. The state owns the casino licenses, but will only get 12.7% of table games, compared to Massachusetts which collects a 25% tax from its private casino owners. Just matching the Massachusetts rate would bring in an additional $ 400 million.
IGT’s $ 400 million overpayment falls into two categories. First, Rhode Island gets ripped off by paying IGT 2.5% of slot revenue for what an independent analyst has described as a useless computer system. In Kansas, IGT receives only 1% of slot revenue for its recently installed computer system. Matching Kansas would net an additional $ 156 million. Second, we’ll pay $ 221 million more to rent slots from IGT and Twin River than if we just bought them – like 90% of casino owners across the country.
Democrats are calling it a “job saving bill,” which is not entirely accurate. The new legislation changes the state’s relationship with IGT to now have all kinds of self-employed, self-employed contractors and outsourced staff as part of its 1,100-job mandate – like its army of lobbyists. Worse yet, the penalty for IGT’s failure to meet the employment mandate is only $ 7,500 per job – although IGT / Twin River asserted in hearings that every job would benefit the state. up to $ 23,750. Why would the state accept a lower sanction for the benefit of its market?
Tellingly, all but two Democrats, including nearly all of the so-called “progressives,” voted to endorse this 20-year tech-based deal that embodies behind-the-scenes transactions, corporate welfare and crony capitalism. If your representative is a big supporter of tax increases and “reform”, ask them why they voted to leave hundreds of millions of dollars on the table for two multinational corporations? How can they now be taken seriously when they protest against “fairness” and “economic justice” and push for higher taxes on everything under the sun?
Fortunately, the General Assembly is not the last word. Governor McKee is. We hope he will seize this opportunity to build a lasting legacy – unsolved by the bad business of his predecessor – and fight to retain more profits from popular casinos to fund education, public safety, protection of the environment, housing, transport, infrastructure and reduce our tax burden.