Twin River Dealt a Blow in Quest to Run Rhode Island Lottery

Posted on: October 30, 2019, 07:54h. 

Last updated on: October 30, 2019, 11:08h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Twin River Worldwide Holdings, Inc.’s (TRWH) effort to wrest control of Rhode Island’s lottery from rival International Game Technology Plc (IGT) may have suffered a blow earlier this week. An executive from the casino operator told policymakers the company would have difficulty matching IGT’s jobs and payroll tallies in the Ocean State.

Twin River Rhode Island president Marc Crisafulli acknowledges the company would have financial difficulty running the state’s lottery. (Image: Warwick Beacon)

TRWH made an offer to run the state’s lottery in July. This came.after launching a public relations offensive against IGT and Gov. Gina Raimondo (D-RI), claiming the gaming device maker controlled too much of Rhode Island’s slots market, and that the governor’s plan to give IGT a 20-year, $1 billion contract was anti-competitive.

The operator of Rhode Island’s two casinos offered an upfront payment of $125 million to manage the Rhode Island lottery, claiming it could keep, if not expand upon, the roughly 1,100 jobs IGT accounts for in the state. Raimondo immediately rebuffed that proposal, noting that TRWH doesn’t have experience running lotteries, and that the jobs and revenue stream are too important to jeopardize.

In recent testimony before the Ocean State’s Senate Finance Committee, Marc Crisafulli, president of TRWH’s Rhode Island business, acknowledged his company may not be able to match IGT’s jobs commitment.

There’s a point at which the requirement is too high,” he said, reports GoLocalProv. “If you told me the requirement was a payroll of $110 million for 20 years, I would tell you that we could not do that economically.”

Twin River previously said it could maintain IGT’s level of employment in the state. But details on that effort were sparse.

Another Chapter

Crisafulli’s comments mark the latest chapter in the multi-month spat between IGT and TRWH, one where Raimondo has been in the center. The governor’s effort to award the 20-year pact to IGT has been scrutinized by politicians from both sides of the aisle, and has drawn an investigation from the state’s Ethics Commission.

Raimondo’s argument for awarding the deal to IGT is centered around three points: keeping the jobs in the state, protecting Rhode Island’s third-largest revenue source, and IGT’s corporate presence there, which comes by way of a 2015 merger with Gtech.

The gaming device maker previously said that without the 20-year agreement, it cannot maintain its current level of employment in Rhode Island.

IGT’s initial accord with the state was signed when Donald Carcieri (R-RI) was governor, and included a clause to maintain at least 1,000 jobs there.

Costly Endeavor

The lottery could prove to be an important revenue source for TRWH, assuming it can win the contract, because new additions to the New England casino market are hampering the company’s two Rhode Island venues.

A recent uptick in sports betting revenue, thanks to the start of football season, is helping Twin River stem some of the lost gaming turnover, because neighboring states Connecticut and Massachusetts currently don’t offer sports wagering. Data indicates sports betting turnover in Rhode Island almost tripled to a record $2.5 million last month.

As for the lottery deal, the current pact with IGT doesn’t run out until 2023, so there’s time for Ocean State policymakers to make decisions. But TRWH doesn’t appear comfortable with the financials.

“I’ll tell you now, though, we won’t be comfortable with a guarantee of $110 million [in payroll] over 20 years,” said Crisafulli in his testimony. “I’m certain of that…we simply can’t do that.”