Sometimes, certain parties in a dispute will never see eye to eye. Sometimes, one party wins out over the other. On a rare occurrence, the dispute is settled through a partnership of the two sides. International Game Technology (IGT) is one side of a Rhode Island casino dispute. Twin River is the other. The two parties have been battling each other for months. Indeed, an agreement between the two has been reached. As the two major players in the state’s gaming industry, this should be a win-win-win all around.
Why Are Twin Rivers & International Game Technologies Making An Agreement to Expand Lincoln Casino?
The two companies have agreed to join forces to create a new business entity. This will set the stage for a $100-million renovation and expansion of Twin River’s Lincoln Casino, not the online casino. It will also lead to a 12,000-square-foot Twin River headquarters in Providence.
The proposed plan still needs to be approved by state lawmakers and gambling regulators. If it does go through, Twin Rivers would emerge as video-slot machine provider, not just a casino operator. Furthermore, this would give the new entity a slice of revenue from that end of the business. Previously, the business had gone out of state to other game manufacturers and suppliers.
IGT would own 60 percent of the new company’s shares.
The bigger picture is a 20-year contract for supplying games in the state. Furthermore, this has been the root of the issue with Twin River executives. They were entertaining potential partners in a rival bid on that lucrative contract. Instead, they will have a 40 percent share of the new venture.
The next step involves the Rhode Island General Assembly. The new company needs approval of the proper legislation to extend the gaming machine contract through 2043. Indeed, this would give the governor the authority to enter in such an agreement. IGT would then commit to keeping 1,100 jobs in the state. It would also invest $150 million in upgrades to the Lincoln Casino. Moreover, this would result in an additional $25 million in license fees. Twin River is currently paying $6.5 million to the state in fees.
Ensure that the gaming floor and its slot machines continue to drive over $300 million a year to the state
A key aspect of this agreement to form a new company was quoted as follows: “Ensure that the gaming floor and its slot machines continue to drive over $300 million a year to the state. Minimize the risk of systems and technology conversions. And overall, enhance Rhode Island’s gaming competitiveness with Massachusetts and Connecticut.”
There are still concerns from state lawmakers to the long-term contract. It would involve a no-bid Lottery contract as well. An independent analysis of Rhode Island’s current and proposed Lottery contracts with IGT was completed. The legislators are pleased that the ongoing dispute between IGT and Twin River would be resolved. Combined, they provide the state’s third-largest source of revenue.
Gov. Gina Raimondo is happy about retaining the 1,100 IGT jobs. The new joint venture would give the new company 100 percent control of the casino floor. She also voiced concern over the extended length of the 20-year contract.
