The General Assembly in Rhode Island approved a bill this week that will extend the gaming partnerships with IGT and Bally’s Corporation. The Senate voted in favor of the measure at 28-7, agreeing to work with the casino operator and manufacturer, along with the lottery operator. The vote in the Senate came just after the House decided to approve the measure as well.
Details of the Approval
With the approval of the measure, IGT will maintain its exclusive control of the state lottery through the year 2043. IGT has agreed to have an employee workforce of 1,100 people as it offers services in the state. The company must also complete payment of $27 million during the 20-year extension.
For Bally’s, the company will maintain its monopoly in the state through the year 2036. The company will invest $100 million or more in its Twin River Casino that is located in Lincoln. House Speaker K. Joseph Shekarchi said that the legislation helps to increase the revenue in the state and preserves jobs that are critical to the community.
The lottery and casino gaming contribute a large portion of the tax revenue in the state. The two are the third-largest source of tax revenues for Rhode Island. For the Bally’s Casinos, the tax rate is a high 74% which helps to bring in much-needed revenues.
The state lottery provided just over $293 million to the General Fund during the fiscal year. Before the pandemic, the total for the fiscal year came in at almost $400 million. The goal is to get back to that point again as the pandemic starts to become a distant memory.
With the new legislation, Bally’s and IGT will create a joint venture. The new company will be responsible for providing the gaming machines for the casinos in the state. Bally’s will have a 40% stake in the joint venture while IGT will have a larger 60% stake.
The company will use IGT machines and units from other manufacturers to provide gamblers with several options when it comes to machines. Laws in the state require 6% of the VLTs in operation to be replaced each year for new machines. Any terminals that are underperforming will be reviewed by state officials and replaced or modified to perform better.
The legislation was passed back in 1992 that allowed commercial casino gambling to take place in Rhode Island via pari-mutuel wagering facilities. The law allowed only video lottery terminals (VLTs) instead of traditional slot games. The VLTs provided gaming where the outcome is provided by a computer system instead of a random number generator.
Because IGT was a lottery gaming operator, the company was allowed to offer its machines in the casinos. Each venue in Rhode Island must have at least 50% or less of its machines be operated by IGT. Back in 2006, IGT merged with Gtech, and the presence of the company within the casinos in the state was higher than the 50% requirement.
The Twin River company is now known as Bally’s after the brand was acquired by Caesars Entertainment last year. The company operates the Tiverton and Lincoln venues. The casinos have argued in the past that the contract with IGT is bad for the state as the machines do not stack up competitively.
However, the two will have to continue to work together as this new legislation comes into effect.