PROVIDENCE -- House Republicans on Tuesday called for an “independent study″ of the arguments for and against the proposed 20-year, no-bid extension of International Game Technology’s Lottery contract and the rival proposal by a consortium led by Rhode Island-based casino operator Twin River.
The Republicans are suggesting the legislative leadership take philanthropist Alan Hassenfeld, the former chairman and CEO of toy and entertainment giant Hasbro Inc., up on his offer to finance an independent analysis of the proposed IGT deal.
“We have learned much over the past few weeks,” said Rep. Blake Filippi, the House minority leader, “but perhaps most important, we have learned what we do not know. The complexities of this industry require outside expert assistance. We need to get this right. The future of gaming revenues is far too important to rush through when there is such conflicting testimony from the Administration, IGT and Twin River.”
“We must not gamble with our third largest source of state revenue,″ Filippi said.
“Since the current contract is not up until 2023, we have plenty of time to get this right,” said Senior Deputy Minority Leader Justin Price, who also took part in the two House Finance Committee hearings on Gov. Gina Raimondo’s proposal to extend IGT’s contract.
The response from House Speaker Nicholas Mattiello: “Leader Filippi has suggested that an independent study with private funds be conducted on the IGT contract extension and Twin River’s counter proposal. Leader Filippi can do what he deems appropriate since it will not involve any taxpayer monies.” (Hearing this, Filippi’s said: “Great ... I thank the Speaker for keeping an open mind on an independent investigation ... [and] I look forward to speaking to Alan Hassenfeld as soon as possible.”)
Added Senate President Dominick Ruggerio: “The Senate has outlined arobust process for reviewing the lottery contract legislation. At this point, only two hearings of at least five planned hearings have been held. We will determine what, if any, additional information may be necessary at the conclusion of the public hearing process.”
As the Republicans see it, these are the disputed issues in the high-stakes battle between IGT and Twin River, which is arguing for a chance to bid alongside its new partners: Camelot and Intralot.
“Does the proposed IGT contract include a premium on services as a subsidy to keep 1100 jobs in Rhode Island? The Administration and IGT claim there is no premium on services in the proposed IGT contract, while Twin River pegs the premium at approximately $300 million over the life of the proposed contract.
“How well do the IGT Video Lottery Terminals (VLTs) perform against their competitors on the Lincoln and Tiverton casino floors? IGT testified that their VLTs are modern and largely performing at or above their competitors’ machines on the Lincoln and Tiverton casino floors... Twin River claims that the IGT machines are underperforming and largely outdated.
“Is it in Rhode Island’s best interest to have IGT supply up to 85% of the video lottery terminals (VLTs) on the Lincoln and Tiverton casino floors? The Administration and IGT testified that this is an acceptable provision in the proposed IGT contract, which includes performance metrics to ensure IGT’s VLTs maximize revenue... Twin River contends that state revenues will be hurt if one company controls 85% of the casino floor, because it restricts competition...
“Is 20-years an appropriate length of time for this type of technology contract?
“What is the ultimate cost to the state from the competing proposals and how do they compare to other state’s gaming contracts?
“It is indisputable that IGT has the technology know-how to operate these specialized systems. The Administration and IGT have questioned whether Twin River and their partners can similarly perform.”
The Providence Journal
Chief of Staff