Caesars Entertainment eyes the Rhode Island market

A delegation from the Narragansett Indian tribe went to the State House to try to win Governor Chafee’s support for their latest casino dream. Harrah’s was the financial backer of the tribe’s last bid to open Rhode Island’s first full-fledged casino in West Warwick. Voters defeated the proposal in 2006.

Tribal leaders and their Rhode Island lawyer, John Killoy, are now talking about a complicated scenario in which they would line up a partner to help them buy the privately owned Twin River slot parlor, that is home to more than 4,750 of the state Lottery’s video-gambling machines, apply to the U.S. Department of Interior to take the gambling hall into trust, and then operate it as a full casino under the auspices of the Indian Gaming Regulatory Act.

Chafee initially said the tribe had an idea worth pursuing, but then backed off, saying the state would need an in-depth financial study first, after critics warned of US$100 million or more in revenue losses, if the Indian Gaming Regulatory Act slashed the state’s 61 % share of the video-slot revenue by more than half, and Twin River’s owners said the gambling hall is not for sale.

Wells Wachovia, Sankaty and the other financial institutions that have owned Twin River since it emerged from bankruptcy last fall have launched a campaign to offer blackjack and other traditional casino table games, a move that would require voter approval.

Other than talks about a potential management contract some time ago, Jones said, her company has made no effort to buy Twin River, but is watching developments here.

“If it’s easier to stay in Massachusetts, and the product isn’t differentiated, why would you drive to Rhode Island?” she asked. “But the good news is, they have a window,” she said of Rhode Island’s decision-makers.

“I mean Massachusetts, I think, eventually goes, but they are sort of stuck in the mud,” and even if the lawmakers there legalize casino gambling, “they then have to set up a regulatory structure and a process and bidding, and then you have to build it, so you are what, three, four years away best case, which gives Rhode Island an opportunity if they take it.”