Rhode Island Casino Battle Update

While the Tribe refuses to allow the full contract to be seen, voters will now have a better idea of what monies the Narragansetts stand to gain if the $1 billion casino resort is built. Citizens will get a chance to vote on changing the state constitution in November by voting on a referendum that will be on the ballot. The state constitution needs to be changed because it currently prohibits any entity other than the state from operating a casino.

According to a document obtained by www.onlinecasinocrawler.com, the tribe will receive only about five percent of the casino’s adjusted gross revenue, which according to a tribe attorney Jack Killoy means all gaming and non-gaming revenue minus all taxes.  The tribe could stand to rake in an extra half percentage point if the casino’s revenue tops $800 million. If revenues top $1 billion and EBITA is more than 26 percent, the Tribe’s share rises to six percent.

Killoy believes the Narragansetts could earn as much as $20 million a year by the third full year of operation. The original agreement between the Naragansetts and Harrah’s was signed in August 2005.

The Tribe is also due to receive $600,000 for health and education from Harrah’s after groundbreaking and annual payments of $150,000 for those funds.

Meanwhile, Rhode Island outspoken Governor  Donald L. Carcieri and the state’s Attorney General Patrick C. Lynch have requested the Rhode Island Supreme Court to provide an opinion on the constitutionality of the casino referendum. The Governor has been a staunch adversary of this proposed deal between Harrah’s and the Narragansetts because a deal has not been struck with these groups on how much taxes they will pay to the state. Earlier versions of an agreement between the state and the Tribe varied the tax payments between 25 percent and 40 percent.

Additionally, Carcieri and Lynch feel this ballot is unconstitutional because the referendum favors the town of West Warwick at the expense of the rest of the state by giving the town the sole right to veto power over the proposed constitutional amendment.

“After much consideration, I have decided that the people have a right to know if the casino question is constitutional before they vote on it. It would be a tragedy if Rhode Islanders were to vote to approve the casino amendment, only to see it overturned by the courts afterwards,” the Governor said. “Everyone knows that I have strongly opposed casino gambling in Rhode Island, and that I think that amending the state constitution to give a special deal to a specific out-of-state gambling corporation is inexcusable. But let me be clear: My primary purpose here is to defend the state constitution and to protect Rhode Islanders from voting on an amendment that might itself prove unconstitutional. The people have a right to decide. But it makes no sense to ask them to vote on a question that might be struck down after the vote takes place.”

According to Chief Sachem Matthew Thomas of the Narragansett Indian Tribe in a statement said, “The governor is employing another desperate tactic to deny Rhode Islanders the right to vote on this issue and to deny my tribe and Rhode Islanders jobs and tax relief. We feel certain that the challenges raised by the governor have no merit.”

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