PROVIDENCE -- Philanthropist Alan Hassenfeld, the retired chairman and CEO of the Hasbro toy company, has sent Rhode Island lawmakers an open letter begging them to take a second look at the giveaways in the proposed 20-year, no-bid IGT contract.
In the email he sent the lawmakers — and the governor — on Wednesday, he urges the lawmakers to read the report produced by the independent consultant commissioned by House leaders. Among the conclusions: other states have better Lottery and video-slot deals.
Advocates for the proposed 20-year contract point to IGT’s commitment to 1,100 jobs in Rhode Island, paying at least 150% of the minimum wage which will rise by $1 in October to $11.50 an hour.
The U.K.-based International Game Technology has also dangled the possibility it will pull up stakes in Rhode Island — and leave — if it doesn’t get a contract with terms that makes it worthwhile to the company to stay.
Tallying up the numbers reflected in the report by the Maine-based Christiansen Capital Advisors, Hassenfeld asks the lawmakers and the governor to:
“Please help me to understand: ... Video Lottery Terminals (VLTS) cost $15,000-$25,000 to own for life, but we are paying $7,000 in lease payments per-year per-VLT (7% of net terminal income of approximately $100,000 per machine), and IGT and Twin River only have to replace 6% of the machines per year.
“Why would we lease machines when we can buy our own?”
His math: “Over five years, the cost to rent 5200 VLT machines is $182,000,000, while the cost to buy them outright is $104,000,000.
“If the state bought new machines every five years, making 4 full purchases of brand new machines, it would only cost the state $416,000,000, while leasing them for twenty years would cost $728,000,000.
“Why would we lease?”
“Please help us to understand ... so that we the people understand,″ he wrote. “With warmest regards, and be safe, Alan G. Hassenfeld.”
While his numbers do not exactly match, Hassenfeld’s letter echoes points that House Republican Leader Blake Filippi raised when the House and Senate held hearings last week on the latest version of the proposed IGT contract, without calling the consultant in to testify.
Asked Wednesday why he was jumping back into this Rhode Island debate, Hassenfeld said: “Because, to be very honest, my family foundation gives out millions of dollars a year, a lot of it to Rhode Island.
“And I am just wondering: Am I wasting my money if the decision-makers in the state are not [exercising] the fiduciary responsibility that they have?
“All I can do as a citizen — and remember I am (now) a Florida resident today — all I can do is basically ask people: before you sign on the dotted line, take one last look and make sure you are making the right decision of how we use our limited resources.”
This is not the first time Hassenfeld has waded into the IGT contract controversy. He earlier offered to personally pay for an independent consultant to do an analysis if lawmakers were unwilling to do so themselves.
He also previously acknowledged that Hasbro at one point had a licensing agreement with Scientific Games, which is pushing the lawmakers to slice off one piece of the IGT contract so it can bid to try to regain an Instant ticket printing contract that was given to IGT without a bid.
IGT Chairman Robert Vincent called it “disappointing and surprising that Hassenfeld, an esteemed philanthropist, would threaten to withhold donations to worthy programs in RI that have benefited greatly from the Foundation’s support, to make a political point.”
Vincent said “the Hassenfeld proposal,″ in echoing House Republican talking points, is “simply misguided and ignores significant facts.”
He said buying, rather than leasing VLTs “would impose significant capital requirements on the state at a time when resources are under unprecedented pressure.
His math: “The Lottery would have to lobby the General Assembly for at least $104 million to acquire the existing machines and accept the performance risks,″ and then spend $15 million-$20 million annually on a rolling stock of replacements.
He said Hassenfeld with the GOP lawmakers are effectively “proposing that legislators annually make a choice between the health and welfare of our community and Wheel of Fortune slots machines.”
Twin River executive Marc Crisafulli said the consultant’s report does not take into account the value of the 1,100 job guarantee, a proposed 50,000 square foot expansion of Twin River, which the casino operating company pledged after it partnered with IGT on a deal to supply the video-slots, and other economic development benefits.
Added Senate spokesman Greg Pare: “The [consultant’s] report was written prior to the pandemic. In today’s economic climate, locking in a headquarters of two major companies in Providence, and the many quality jobs they provide, is a major victory for our state.”
The Providence Journal