Rhode Island jobs at issue in lottery deal, Raimondo says

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More than 1,000 jobs in Rhode Island would be preserved through the state's proposed 20-year, $1 billion, no-bid gambling contract extension with IGT Global Solutions Corp., Gov Gina Raimondo told a legislative panel Tuesday.

Going through a standard request-for-proposals process would jeopardize those jobs and the state's third-largest revenue source — gambling — Raimondo said at a House Finance Committee meeting.

State lawmakers must approve the contract.

"We're at the risk of losing 1,000 jobs. That's what's at stake here," Raimondo said, defending the no-bid arrangement. "There are only three companies in the country capable of operating the lottery. Only one of them was founded in Rhode Island and is right outside this building.”

in-state casino operator Twin River Worldwide Holdings Inc. has called for a bidding process. The battle between ITG and Twin River, which runs the state-owned casinos in Lincoln and Tiverton, has involved the state's top lobbyists and a series of dueling television and newspaper ads locally.

In addition, the State Ethics Commission has begun investigating a complaint against Raimondo, launched by former state Republican chairman Brandon Bell, who alleges that Raimondo is a business associate of Donald Sweitzer, a lobbyist for IGT and its retired chairman. She chairs the Democratic Governors Association and he is its treasurer.

IGT, now of London and Italian-owned, began as GTech of Providence. Then-Gov. Donald Carcieri in 2003 struck a 20-year agreement with the company to keep it from moving to Massachusetts.

"Now, in 2019, the company is at a turning point again," Raimondo said.

According to the governor, chief executive Marco Sala visited several months ago and briefed her about the company's consolidation plans. The company has offices in Rome and Las Vegas in addition to its London headquarters and Providence.

"He was not threatening. He was crystal clear," Raimondo said Tuesday. "When you're the governor, you have to listen and do something."

IGT would have exclusive rights to manage traditional lottery games and operate 85% of the state’s video slot machines in exchange for a $25 million payment plus $150 million in capital investment, either directly or through a third party.

Rhode Island voters authorized the lottery in 1973. The system has been under executive branch control since 2005.

Northeast states with revenue gaps to fill have begun to covet sports betting. Villanova School of Business professor David Fiorenza has called the initial revenue a "sugar high."

"This is a short-term solution to a long-term problem," David Fiorenza, a finance professor at Villanova School of Business, said on a Bond Buyer podcast. "They're just looking for a quick fix for five years, and then what is going to happen"?

Comparisons are difficult given the lack of comparable data, Rhode Island House Fiscal Advisor Sharon Reynolds Ferland told lawmakers. "Everyone agrees that the length and scope of the contract before you is not typically found in other states," she said.

In addition, Rhode Island's direct role in running casinos is rare, she added.

The House and Senate finance committees are holding separate hearings on the lottery contract. IGT officials and public speakers are scheduled to appear before the House panel Oct. 3, according to Chairman Marvin Abney, D-Newport.

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State budgets Entertainment industry Gina Raimondo State of Rhode Island Rhode Island