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RI POLITICS

House revamps $1b deal for IGT, Bally’s to handle R.I.’s gambling technology

The new version of the proposal would protect more than 1,000 jobs and guarantee big capital investments

A patron plays an electronic game at the Twin River Casino in Lincoln, Rhode Island on June 8, 2020.
A patron plays an electronic game at the Twin River Casino in Lincoln, Rhode Island on June 8, 2020.Gretchen Ertl/The Boston Globe

PROVIDENCE — The House on Tuesday unveiled a revamped version of a proposed no-bid, $1-billion deal for IGT and Bally’s to handle the state’s gambling technology for the next two decades.

On Thursday evening, the House Finance Committee is expected to take up the amended legislation, which legislators are presenting as a way to bolster Rhode Island’s third largest source of revenue.

“The legislation increases revenue to our state and preserves critical jobs,” House Speaker K. Joseph Shekarchi, a Warwick Democrat, said. “Along with the Senate, we have taken several steps to enhance the legislation on behalf of the taxpayers.”

Senate President Dominick J. Ruggerio, a North Providence Democrat, said the Senate Finance Committee reviewed the proposal and developed legislation aimed at protecting more than 1,000 jobs, guaranteeing big capital investments, and preserving the state’s third largest source of revenue.

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“I am grateful to Speaker Shekarchi for working to enhance the proposal to further benefit the state, and to IGT and Bally’s for their continued partnership and investment in our state,” Ruggerio said.

At the request of House and Senate leaders, key changes were made to the legislation, including:

  • The upfront payment to the state will increase from $25 million to $27 million.
  • Bally’s will accelerate job creation at its corporate headquarters and will meet the 30 new jobs requirement by Dec. 31, 2022.
  • Bally’s will increase its commitment to the I-195 Commission for park renaming rights to $250,000 in the first year, $150,000 in the second year, and $100,000 thereafter, for a total increased commitment of $200,000.
  • The IGT financial commitment has increased from $150 million to $155 million.
  • The footprint for Bally’s commercial space in Providence has increased from 12,000 square feet to 20,000 square feet.
  • Increased liquidated damages for any missed jobs count from $6,400 to $7,500 per job for both companies.
  • The commitment to problem gambling was increased from a minimum of $125,000 to a minimum of $200,000

While not part of the legislation, Bally’s (formerly Twin River) and IGT have agreed to raise the minimum wage for its Rhode Island employees to $13 per hour by Jan. 1, 2022; $14 per hour by Jan. 1, 2023; and $15 per hour by Jan. 1, 2024.

Bally’s has also agreed to open an additional Rhode Island office, outside of Providence, and hire a minimum of 30 information technology professionals. Also, IGT’s commitment to a STEM scholarship fund in Rhode Island schools will be increased from $25,000 to $35,000 per year.

While Democratic legislative leaders praised the deal, House Minority Leader Blake A. Filippi blasted the new proposal, saying, “There are not significant changes of any substance that change, what in an objective analysis, is a bad deal for taxpayers. It’s still a bad deal. And the numbers are staggering.”

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Filippi, a Block Island Republican, said it’s very unusual for states to enter 20-year contracts of this nature. “Consultants said we are foolish to enter into a 20-year tech agreement,” he said. “Twenty years ago, I was using a flip phone.”

Filippi said this deal is worse than a previous version in part because Bally’s gets a 13-year extension that continues to provide the company with 86.5 percent of table game revenue. “We entered into a bad deal before. An error only becomes a mistake when you refuse to correct it,” Filippi said. “Those are our our casinos. We hire IGT and Bally’s as our agents.”

Yet, under the proposal, Rhode Island ends up with just 12.7 percent of table game revenue – about half of the percentage that Massachusetts gets from the Encore Boston Harbor casino, Filippi said.

“My message to the legislature is: Let’s not be a sucker,” he said. “They should vote it down.”

Earlier in the day, Governor Daniel J. McKee, a Democrat, said he had not seen all the details of the new deal. But he said, “I think it’s important that we protect the jobs that are going to be protected along with having an agreement that I’m anticipating is going to be an even stronger agreement on behalf of the taxpayers of Rhode Island.”

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The bill still includes the following components from the version introduced earlier this year:

  • IGT will add 100 new jobs, increasing the minimum number of jobs from 1,000 to 1,100.
  • The aggregate payroll must now equate to 250 percent of minimum wage. At a $15 minimum wage, the total guaranteed payroll would be $85 million per year.
  • It provides a penalty against IGT for failure to meet employment levels.
  • Bally’s will add 30 new jobs, with the same requirements and penalties as IGT.
  • Bally’s will invest $100 million, including a 50,000 square foot expansion to its facility in Lincoln.
  • IGT and Bally’s must maintain headquarters in Providence through 2043.
  • The two companies will make various investments that will result in the creation of a joint venture with IGT having a controlling 60 percent stake in the new company and Bally’s owning the remaining 40 percent. The joint venture will be a licensed VLT provider and supply the entirety of the gaming machines to the Lottery. IGT-manufactured machines and multiple other manufacturers will supply the floor that will continue to be managed by an efficiency rating system.
  • A minimum annual replacement cycle will be set at 6 percent with flexibility to replace up to 8 percent in any year.
  • At least 5 percent of the VLTs will be the highly popular premium machines to keep the gaming offering on par with regional competitors.

The Rhode Island Division of Lotteries will continue to maintain oversight and regulation of all gaming. All aspects of the lottery and gaming programs will continue to be state-operated.

Jay Gendron, chief operating officer of Lottery for IGT, said passage of this legislation will keep IGT’s 1,000 “good-paying jobs” in the state, while adding another 100. He said it will also ensure that the gaming floor and it’s slot machines continue to drive over $300 million a year in revenue to the state.

“A really exciting piece of this legislation is that of the $255 million committed by both entities, fully $100 million is earmarked for improvements/enhancements to Bally’s flagship Rhode Island property, Twin River Casino Hotel in Lincoln,” said Elizabeth Suever, vice president of government relations for Bally’s. “The project entails the addition of 40,000 square feet to the gaming floor and a 10,000 square foot spa and enhanced food hall area, built entirely by a union workforce.”

Suever said approximately 20 construction trades will be involved in the construction project, which could take about 12 to 14 months. She said that project could “easily commence” within two months of this legislation passing.

The amended legislation has been named the Marc A. Crisafulli Economic Development Act to honor the executive vice president of Bally’s, who is battling cancer.


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