PROVIDENCE – The state’s two largest gambling companies announced Thursday that they reached an agreement to maintain control of lottery and casino revenue in Rhode Island for at least the next two decades.
Under the terms of the deal, IGT and Twin River would create a new company that would supply all of video lottery terminals – slot machines or other electronic games – to the state’s two casinos. IGT would control 60 percent of the company and Twin River would control 40 percent.
Twin River has also agreed to make a $100 million investment in its Lincoln casino in an effort to compete with Encore Boston Harbor, adding 40,000 square feet of gaming space on its first floor and a foot spa to its hotel over the next 18 months.
The two publicly traded companies are not merging, but the agreement to form a new company for their Rhode Island businesses ends a bitter dispute that stemmed from Twin River, the owner of Rhode Island’s only casinos, seeking to block IGT from extending its billion-dollar lottery contract with the state for 20 years.
The deal is complicated because it also hinges on both companies receiving legislative approval to extend their existing contracts with the state through 2043, although Senate President Dominick Ruggerio and House Speaker Nicholas Mattiello have already telegraphed their support.
“This announcement signals the start of a strong three-way partnership that includes not just the two companies, but the state of Rhode Island as well,” IGT chairman Robert Vincent said in a prepared statement. “Importantly, it will harness the strongest attributes of each company to better serve Rhode Island taxpayers, to preserve valuable jobs and to make meaningful infrastructure improvements at the gambling facilities.”
Casino and lottery money is Rhode Island’s third-largest source of revenue, generating nearly $400 million each year. The companies combine to employ more than 3,500 people.
While the new company would have total control over the video lottery terminals on the floor at Twin River’s casinos in Lincoln and Tiverton, not all of the machines will be provided by IGT. The agreement allows for Twin River to become a technology provider with the state and supply 23 percent of the machines. IGT had been seeking to control 85 percent of the terminals.
IGT and Twin River spent hundreds of thousands of dollars on lobbyists and advertising in 2019 during their feud over Governor Gina Raimondo’s plan to extend the state’s lottery agreement with IGT.
Executives from Twin River argued that the agreement should go out to bid, claiming IGT was losing traction as one of the top slot machine companies in the world. The new deal between the companies and the state would not go out to bid.
Twin River also announced Thursday that the company plans to establish a headquarters in Providence. IGT is already headquartered in Providence.
“We all recognize the New England gaming landscape has changed significantly in just the last short five years, and our players have more choices,” Twin River president Marc Crisafulli said in a prepared statement. “It is crucial that not only the gaming floor in Rhode Island be as vibrant and content-driven as our competitors, but that the wider range of amenities also meet our customer’s expectations.
Raimondo told reporters that she needs to review the details of the deal to see if it benefits taxpayers.
“The bill seems to preserve the 1,100 jobs -- that’s a good thing, so we’ll see,” she said. “It’s clearly better for Twin River. You know, they’ve managed for themselves to get a 23-year extension. They’ve managed better economics for themselves. That could be fine. I have to be sure it’s just as good or better for taxpayers.”