Senate Votes “Ok” For Casinos

PROVIDENCE — Rhode Island’s voters would decide whether a casino should be built in West Warwick, under a bill approved by the Senate Thursday night.

The 23-11 vote moves the bill to the House, which is expected to consider it today. The proposal has advanced quickly through the General Assembly this week, after Harrah’s Entertainment sweetened its offer to the state. The company agreed to a higher maximum tax rate and to paying a 100 million licensing fee over three years, instead of 10.

“The time for us to let the people decide on this issue is now,” said bill sponsor Sen. Stephen Alves, D-West Warwick.

While proponents say the casino could be a boon to the state, opponents argue Harrah’s stands to benefit most.

“It’s no deal for West Warwick … and an overall lousy deal for the citizens of Rhode Island … deal me out,” said Sen. Michael Lenihan, D-East Greenwich. Lenihan had raised questions earlier this month regarding the 7.5-percent share of the revenues being pegged for the Narragansett Indian Tribe, suggesting any such project was not an Indian casino, but a sweeping commercial gaming venture.

Hours before the Senate debate began, Gov. Don Carcieri also lashed out at the project, claiming the “town of West Warwick and we as a state are being played like a fiddle” by Harrah’s.

“What is this thing going to look like? Where is it going to be sited? How large is it going to be? What is the deal for West Warwick? There are a hundred questions, none of which are being answered,” he said.

The Las Vegas-based casino company and the Charlestown-based Narragansett Indian Tribe have proposed a 600-million resort-style casino to open by 2007, generating more than 3,200 direct jobs. But critics have suggested many of those jobs — and much of the restaurant and hotel business — will merely be siphoned from existing business.

 

Harrah’s will own the casino. It has agreed to a tax rate under a 10-year contract of between 25 percent and 40 percent, depending on gross gaming revenues.

The company says the state would collect 113 million in additional gambling revenues in the casino’s first year of operation. Lawmakers must agree to put the project on the November ballot.

Critics of the casino — including former state Sen. Robin Porter of the Kay Coalition — have expressed concern about even putting the casino question on the ballot, saying that a non-specific referendum question could hold dangerous implications for opening the door to other casino gambling facilities. Porter — joined by Rhode Island Shoreline Coalition chief Harry Staley and attorney Bruce Goodsell, an expert on Indian legal issues, in a visit to The Sun earlier this month — also expressed concern that Harrah’s and its backers will be able to grossly outspend casino opponents in a high-profile referendum campaign. Staley’s Westerly-based group of shoreline residents has also taken a stand against a casino or a referendum.

At the same time, the state’s two existing gambling parlors in Lincoln and Newport believe Harrah’s has underestimated the negative effect a casino would have on their operations. If they lose money, they say the state would, too, since it collects 60 percent of the profits from video slots at Lincoln Park and Newport Grand. Carcieri has also said the loss of revenue from the existing facilities could make a West Warwick casino a net loser for the state.

Those facilities this year will pay about 220 million in revenues from video slots to the state. Harrah’s has promised to cover any lost gaming revenue to the state for two years.

The town also must complete studies of the proposed project’s effect on the community.

The bill made public earlier this week has also raised the ire of lottery giant GTECH Holdings Corp., which plans to build its new corporate headquarters in downtown Providence.

The West Greenwich-based company last year agreed to the build its new headquarters in the capital city based on revenue projections it says may no longer be valid due to the casino proposal, GTECH spokesman Robert Vincent said.

The company says it has a contract with the state to operate 50 percent of the new video slot machines at any casino, if the machines were under the control of the state Lottery Commission. The deal agreed to by Harrah’s, however, doesn’t include that provision.

Plans for GTECH to add more slot machines at Lincoln Park and Newport have also been delayed, leading the company to question the state’s commitment, Vincent said.

“It’s a matter of good-faith bargaining,” Vincent said. “We’ve been keeping our commitments, then you find, in a rather startling way, the basic foundation you are going forward on is eroding dramatically.”

The company says the casino agreement has caused it to review its plans for a new headquarters.

Sen. Kevin Breene, R-West Greenwich, offered an amendment to put the casino slot machines under the control of the Lottery Commission. The measure was easily defeated.

Alves said no promises were made to GTECH about operating casino slot machines.

Other failed amendments included proposals to provide a share of casino revenues for every city and town in the state, charge 500 million for the casino license and to provide 1 million for a program for problem gambling.

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