peaking at a public hearing conducted by the House of Representatives' Committee on Finance, George Papanier, president and COO of UTGR, the company that owns Twin River, said the expansion of gambling could be achieved without amending the state constitution, the process spelled out in a bill authored by state Rep. William San Bento, a Pawtucket Democrat.
San Bento's proposal, aimed at protecting the roughly us$ 300 million a year the racinos generate for the state in tax revenue, calls for a statewide referendum on a constitutional amendment authorizing full-fledged casinos at Twin River in Lincoln and Newport Grand in Newport, which now offer wagering on slots-like video lottery terminals and simulcast dog and horse racing. The proposed expansion of gambling would allow the addition of such table games as blackjack, roulette and craps.
The bill states that the Rhode Island Supreme Court has determined that "without an amendment to the Constitution, a casino in Rhode Island cannot be privately owned and privately operated …"
Papanier said, however, that the racinos are effectively operated by the state and would continue to be if full gaming were approved. "We have been successful as a state-operated entity regulated by the Rhode Island Division of Lotteries and remain confident that we can continue to produce revenue for the state while operating under the existing state constitution," he told committee members.
Twin River, whose ownership, faced with insurmountable debt, filed for bankruptcy protection last June, has posted modest revenue increases over the past year, bucking the industry trend. If given the "necessary tools," Papanier said, the facility "can successfully compete with other casinos in Connecticut as well as those envisioned for Massachusetts," where lawmakers are expected to approve casinos and perhaps the installation of slot machines at existing racetracks.
Such action would be expected to prompt Massachusetts' federally recognized Indian tribes to pursue their own casino projects. The Mashpee Wampanoag Tribe, in fact, announced this week that it wants to build a resort casino in Fall River. "Absent full casino gaming, the state's annual revenue stream … will be placed in jeopardy," Papanier said. "Employment for many Rhode Islanders could be in jeopardy. … we would literally be in a fight for our survival."
In response to a question from Representative Steven Costantino, the Providence Democrat who chairs the House finance committee, Papanier said he believes a Fall River casino would cost Twin River between a quarter and a third of its business and have an even greater impact on Newport Grand. He said half of Twin River's customers are Massachusetts residents.
Noting the urgency surrounding the issue, Representative John Savage, an East Providence Republican, appeared intrigued by the idea that gambling could be expanded at Twin River and Newport Grand without amending the constitution. He wondered, however, whether an attempt to do so could survive a legal challenge.
Craig Eaton, UTGR's senior vice president and general counsel, said the state constitution allows state-operated lotteries and that courts have held that table gaming is considered a lottery because it involves games of chance. He said voters' rejection of a 2006 referendum on an amendment that would have allowed a casino in West Warwick involved a privately owned project.
Eaton said the expansion of gambling at the existing racinos, as outlined in the San Bento bill, would have to be approved by voters statewide and by voters in Lincoln and Newport.
Mike Levesque, a former West Warwick mayor who was involved in the West Warwick casino project as a consultant for Harrah's Entertainment, voiced support for expanded gambling, while members of the Newport-based Citizens Concerned About Casino Gambling opposed the bill. The Reverend Eugene McKenna, a retired Middletown, R.I., pastor and president of the citizens' group, said residents thought they had defeated expanded gambling "once and for all" in 2006, and that it would be unfair to put it before them in another referendum four years later.