For such a little state (whose gambling revenue is the third largest source of money in the state) Rhode Island sure had a lot of news this week.
This post is a long one, so if you want the abridged version, read the Bold Items and the NETG (NETimeGambling) analysis.
Item #1 – Twin River Management Group has entered into an agreement to purchase Newport Grand Casino. It includes the interest in the purchase and sale agreement currently held by Newport Entertainment and Leisure, owned by Joseph R. Paolino Jr. and Paul Roif and should close before June 30, 2015. According to John E. Taylor, Jr., chairman of the board of Twin River Management Group and Twin River Casino, “As a company headquartered in Rhode Island, we understand how important the future of Newport Grand is to the state and when the acquisition opportunity presented itself, believed that we might be best qualified to preserve and possibly enhance that revenue and protect valuable jobs……..Additionally, there are significant synergies that exist between Newport Grand and Twin River with respect to cost efficiencies, technical integrations and importantly, marketing approach and cooperative dollars that would allow for maximization of future revenues.”
NETG Analysis – Brilliant move. If the residents of Newport only want to take and not give to Paolino, then connecting the two properties and rewards clubs can only make Newport stronger in the long run. This could have held off the death spiral expected for Newport Grand at least a little bit.
Item #2 – Narragansett Tribe gets “dissed” again. Scott McKay reported that the Rhode Island Supreme Court has dismissed a challenge to the constitutionality of the state Casino Act. Under the state Constutition, voters statewide and in a host community must approve before any gambling expansion is allowed. While the tribe states that the state’s law that regulates casinos is unconstitutionality vague and overly broad, the Rhode Island Superior Court disagreed.
NETG Analysis – Sounds like politics as usual in Rhode Island, and anti-Tribal sentiment as a whole in New England. Just ask the Passamaquaddy in Maine, the Eastern Pequots and Paugussets in Connecticut and the Wampanoags in Massachusetts. Oh, and interesting that Justice Maureen McKenna Goldberg did not participate in the matter. Her husband, Robert Goldberg, is a prominent Statehouse lobbyist who has represented gambling interests, including Twin River.
Item #3 – Getting closer to a hotel at Twin River. Rhode Island lawmakers want to eliminate a state prohibition against building a hotel at the Twin River Casino in Lincoln, saying the casino needs to be more competitive with nearby gambling facilities. (money, or the perceived future of less money, talks) Lincoln town officials have been receptive to plans to build a four-story hotel with about 200 rooms. Current state law prohibits the casino from building a hotel on its premises. Officials say the restriction was imposed to protect the viability of Providence hotels.
NETG Analysis – Need It, gotta have it. Rhode island’s revenue will be squeezed to the max without someplace for patrons to stay on site. 200 rooms will not impact Providence hotels and TR may even bring more into their large Event Center, since people would be able to stay after the event. Packages including events, holiday promotions, etc can all be expanded as a resort instead of just a gambling hall.