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4 things Rhode Islanders should know about the state’s newly proposed lottery deal

The revamped 20-year deal with IGT and Bally’s has a lot of components. Here are the important ones

The House leadership unveiled a revamped 20-year deal with IGT and Bally’s Corporation to command most of Rhode Island’s gambling industry — the state’s third largest source of revenue.
The House leadership unveiled a revamped 20-year deal with IGT and Bally’s Corporation to command most of Rhode Island’s gambling industry — the state’s third largest source of revenue.John Locher/Associated Press

PROVIDENCE — The House leadership unveiled a revamped 20-year deal with IGT and Bally’s Corporation to command most of Rhode Island’s gambling industry — the state’s third largest source of revenue.

The debate over the state’s lottery system, including control of the two state-owned casinos in Tiverton and Lincoln, has been scrutinized well before the COVID-19 pandemic. But the ongoing public health crisis has forced lawmakers to rethink what entering a two decades-long contract could mean.

Before the House Committee takes up the amended legislation Thursday for a vote, here are some highlights of the deal that Rhode Islanders should know.

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Job creation

House Speaker K. Joseph Shekarchi, a Warwick Democrat, says the new deal would increase revenue and “preserve critical jobs.”

Not only does this new legislation protect more than 1,000 Rhode Island-based jobs, it’s also requiring further job commitments from both companies. IGT will be expected to add 100 new jobs, which increases the minimum number of jobs from 1,000 to 1,100. The aggregate payroll must now equate to 250 percent of minimum wage. Simply put, at a $15 minimum wage, the total guaranteed payroll would need to be $85 million per year.

Bally’s — formerly known as Twin River Worldwide Holdings — will be expected to accelerate job creation at its corporate headquarters in Lincoln, Rhode Island, by hiring an additional 30 employees by Dec. 31, 2022. This job commitment has the same payroll requirements as IGT.

Both companies will face a penalty if they fail to meet employment levels.

During a press conference on Tuesday, Governor Dan J. McKee said he supported the deal because it kept jobs in Rhode Island.

IGT and Bally’s to invest in the state

Bally’s will also increase its commitment to the I-195 Commission for park renaming rights to $250,000 in the first year, $150,000 in the second, and $100,000 thereafter. IGT’s financial commitment has increased from $150 million to $155 million.

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The companies will also have to commit $200,000 to problem gambling, compared to $125 million from the previous deal.

IGT’s commitment to a STEM scholarship fund in Rhode Island schools will also increase, from $25,000 to $35,000 annually.

Exclusive control

The bill obligates IGT and Bally’s to make a commitment — and several investments — in Rhode Island. However, in turn, the state is giving this IGT-led partnership exclusive control of the technology that runs all state-sponsored gambling through 2043.

The contract, which would go into effect in 2023, would allow Bally’s to get a 13-year extension that continues to provide the company with 86.5 percent of table game revenue. Rhode Island will get just 12.7 percent of table game revenue, which is about half of the percentage that Massachusetts gets from the Encore Boston Harbor casino.

House Minority Leader Blake A. Filippi, a Block Island Republican, blasted the deal Tuesday. He said there are “not significant changes of any substance” and is a “bad deal for taxpayers.”

“We entered into a bad deal before. An error only becomes a mistake when you refuse to correct it,” Filippi said. “Those are our casinos. We hire IGT and Bally’s as our agents.”

The plan to keep up with regional competitors

The deal also comes at a cost — for both companies. The IGT-led partnership, where IGT will control 60 percent and Bally’s will own the remaining 40 percent, will have to put down a deposit to the state. What was supposed to be $25 million paid upfront will increase to $27 million under the new deal.

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Legislative leaders also said Bally’s has agreed to open an additional Rhode Island office, outside of Providence, for those 30 new hires in information technology. Bally’s will also invest $100 million, which includes a 50,000 square foot expansion, to its casino in Lincoln.

Also, the gaming machines will continued to be managed by an efficiency rating system. But a minimum of 6 percent of those machines will need to be replaced each year and at least 5 percent of them will need to be highly popular premium gaming machines in order to keep up with the offerings of regional competitors.



Alexa Gagosz can be reached at alexa.gagosz@globe.com. Follow her on Twitter @alexagagosz. Edward Fitzpatrick can be reached at edward.fitzpatrick@globe.com. Follow him on Twitter @FitzProv.