Casino Debt Limit Issue Causes Twin River to Pay $180K Fine
Gambling operators across the United States must adhere to strict local regulations in order to maintain licensing once approved for gaming in their individual state. If any condition of the gaming license is broken, the operator is at risk of losing licensing, fines or other punishments. In Rhode Island, casino operator Twin River Worldwide Holdings must now pay $180,000 to the state in order to settle a dispute involving a violation of gaming license conditions.
Increase in Annual Spending plus Fine
Twin River operates two casinos in the state, having been fined for the violation and asked to increase their annual spending on the gambling venue located in Lincoln. The fine and increase in spending was allocated based on a settlement agreement between the casino operator and the state.
The dispute began due to the debt levels of the gambling company increasing and the company vocally speaking out against the proposal by Governor Gina Raimondo’s administration to extend the contract of IGT with the state Lottery without holding a bidding process.
IGT is the provider of slot games for Twin River in Rhode Island and they operate the venues computer system connecting gambling devices. The casino operator has stated that IGT’s machines are not performing well over the past few years, especially when considering the average revenues generated from other slot machines by different providers.
Based on Twin River’s gaming license terms, the company cannot go over a four to one ratio of debt to revenue from the two casinos in Rhode Island. Back in May, Twin River asked to change the terms of their debt and provide with shareholders with stock buybacks and dividends. Based on filings in the state, the change moved the debt ratio to 4.5 to 1, which is of course, over the acceptable limit.
According to Twin River, they were assured by officials that the debt limit would increase. However, the state changed their mind once the operator decided to speak out against the state’s deal with IGT. According to CEO and President of Twin River, George Papinier, the company was warned by a senior member of the governor’s administration that if the deal were opposed, consequences would occur.
The state maintains they did not agree to change the license terms of Twin River. A letter dated back in September by the Lottery Director Gerald Aubin and the Director of the Department of Business Regulation Elizabeth Tanner, said the claim that they agreed to change the terms was patently false.
With the new settlement based on the issues Twin River is experiencing with the state, the $180,000 fine will be paid, and the company must spend a minimum of $12 million to improve their Lincoln casino for three years starting in January of next year.
They have also decided to waive their right to seek a change involving their debt limit until June of next year. Despite paying the amounts set in the settlement, Twin River has not admitted any wrongdoing.