Harrah’s Hopes Hinge On RI Referendum

...the Narragansett Indian Tribe and Harrah’s Entertainment (their gaming business associates) to circumvent a state constitutional provision requiring the state to run all casinos and lotteries.

Approved by a 23-13 measure, if the November resolution passes Harrah’s executives said they would pony up a $100 million licensing fee and invest up to $1 billion in the casino resort. The resort would be located in West Warwick which could include a 500 room hotel tower, 140,000-square-foot casino featuring 3,500 slot machines, 100 table games and 50 poker tables.

However, there is nothing in the referendum that sets the tax percentage that state would be guaranteed. While the Indian tribe will get a minimum 5% of casino revenue, the state government will only work to forge a deal with the Narragansetts and Harrah’s after the bill has been passed; a troubling proposition for some state lawmakers.

Currently Rhode Island rakes in about 60% income from the state’s two existing slot facilities -- the Newport Grand and Lincoln Park.

By putting the decision to the voters, it’s an effective political maneuver that will prevent the Rhode Island Supreme Court and Governor Donald L. Carcieri’s from blocking the potential casino.

Late last night the Governor issued a statement saying how disappointed he was in the state Senate’s decision.  “I have consistently argued that casino gambling is a bad idea for Rhode Island. A privately-owned casino will undercut state revenues from Lincoln Park and Newport Grand destroy local businesses and jobs, increase the potential for public corruption, and hurt Rhode Island families by escalating the incidence of gambling addiction.”

 “Sadly, over the last few weeks, the Harrah’s casino scheme has gone from bad to worse. In particular, the Harrah’s casino bill no longer includes the provisions that describe how much the casino will pay to the state. In approving this measure, the General Assembly voted to give Harrah’s Entertainment a blank check. Unfortunately, Rhode Island citizens will be forced to pay the bill.”

Narragansett chief Matthew Thomas was obviously satisfied by the Senate vote. He explained his tribe has been unsuccessfully been trying for more than a dozen years to get to this point.

"We're delighted that obviously this is going to go to the people, where it belongs. And at the end of the day, we hope they pass it so we can put people to work and help our tribe as far as education, housing and getting some of them out of a life of poverty," he said.

For its part, Harrah’s Entertainment executives stated in a hearing this week legalizing a Rhode Island casino would eject a minimum of $144 million into the state tax system. It would also generate jobs.

According David Satz, Harrah’s vice president the company will create a mega-resort featuring restaurants, entertainment, a movie theatre and a hotel. Pointing to the neighboring casinos Foxwoods and Mohegan Sun (incidentally the world’s two largest casinos), Satz said Rhode Islanders currently spend $322 million at the Connecticut casinos and $1 billon dollars is spent by Connecticut and Massachusetts residents.





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