Michael Graham offers a national political perspective as an explanation for the strange long-term, no-bid contract that Democrat Governor Gina Raimondo has proposed for IGT’s video slot machines:
To outsiders, the story sounds like an episode of the TV show “Scandal:” A governor with close ties to a lottery company secretly negotiates a no-bid, twenty-year, $1 billion contract, while the company’s former chairman works as her top fundraiser.
But in Rhode Island, the home of legendary political operator Buddy Cianci, some consider it business as usual.
The governor is Gina Raimondo (D-R.I.), the new head of the Democratic Governor’s Association. The corporate exec is Donald Sweitzer, who until recently was chairman of IGT Global Solutions Corporation, the company that currently has Rhode Island’s lottery and electronic gaming contract.
Beyond the shady politics, Graham emphasizes the length of the deal. In an evolving gambling market on a rapidly changing technological landscape, can a 20-year contract even conceivably be worthwhile for taxpayers?
Andrew Cline of the Josiah Bartlett Center, a free-market think tank, adds that a 20-year contract, regardless of transparency, also raises questions about whether taxpayers are the priority in this deal.
“Setting aside the question of who the vendors are and what the contract says, the idea of any 20-year contract with the government is a problem, particularly for taxpayers,” Cline said. “It takes the pressure off the vendor to compete and improve. Give them a five-year contract and they know that they’re going to have to find ways to lower costs and improve quality if they’re going to compete.”
What are we getting in exchange for all that fiscal certainty for the company?
Naturally, in Graham’s view, it all comes down to the political ambitions of the governor, with which a guy like Sweitzer could be extremely helpful. Given new poll results showing Raimondo to be (just barely) the second least popular governor in the country, Raimondo will need all the help she can get.