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A Relatively Small Sports Gambling Payoff for Host Communities

As I highlighted on Tiverton Fact Check, the budget proposal from the Rhode Island House would change the legislation initiating sports gambling at the two Twin River establishments: 

Now another chunk of cash looks likely. When we mentioned that a Supreme Court ruling had put sports gambling on the table for Twin River, supporters of Budget #1 took to social media to say it was misleading even to hint that the town might receive revenue from this new source. Well, with the introduction of the Rhode Island House’s version of the budget, Friday, a number has been put on that windfall:

The state shall pay the Town of Lincoln an annual flat fee of one hundred thousand dollars ($100,000) and the Town of Tiverton an annual flat fee of one hundred thousand dollars ($100,000) in compensation for serving as the host communities for sports wagering.

Of course, while that’s something, it doesn’t seem like much in comparison with the $23 million the state’s expecting for itself.  Why the state wouldn’t simply define sports gambling as either a table game or a video slot for the purposes of calculating host community shares (which would be 1% or 1.45% of revenue, respectively), is not clear.  Local residents of Tiverton and Lincoln should hope their representatives and senators are still pushing for more.

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When Government Can Get a Project Done Early

The week before Tiverton’s financial town referendum (FTR), I reported that state estimates of revenue from the Twin River casino in Tiverton were based on a September 1 opening — a full month before earlier estimates and two months before the date that some preferred for local purposes.  The budget that I submitted, Budget #2, which would have reduced the tax levy by 2.9% and finally brought our tax rate back into line with neighboring Portsmouth’s, used the September 1 estimate (although with revenue estimates still lower than the latest from the state).

Well, wouldn’t you know it, the week after the town government’s higher-tax budget won the referendum, with questions about casino revenue front and center, Twin River could no longer contain its enthusiasm and proclaimed:

Twin River beat the odds and will get gamblers to the tables a month earlier than expected.

John Taylor Jr., chairman of Twin River Management Group, said the casino will open on Sept. 1 instead of the previous forecast of an Oct. 1 opening.

In the past, the elector petitions have tended to win by 60% versus 40%, but this year Budget #2 lost roughly 45% to 55%.  The Budget #1 advocates managed to erode or eliminate the typical margin relying heavily on exaggerated warnings about what would happen if the assumed casino revenue didn’t materialized.  The victory, however, arguably came from the defection of people who typically vote for the lower-tax budgets but found use of the casino revenue to conflict with their conservative inclinations.

In fairness, on our side of the aisle, when we talk about government projects, we tend to assume that they can never come in on time.  In this case, that assumption misses the key fact that the state government is relying on this revenue.  Roads, bridges, and public works projects can take forever because the money is endless and the economic downsides primarily hit the private sector.  The casino is part of a race to get ahead of the competition with other states.

Twin River’s optimism may still prove to be misplaced, but it looks unlikely, and frankly, my expectation is that the initial revenue estimate for the town is likely to prove to be about half what comes in.  We’ll see.

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The Coy Calculations for Sports Betting

I’ve got a post on Tiverton Fact Check that might be of some interest statewide.  Most of it has to do with the increased expectations for revenue from the Twin Rivers location soon to open in town (which argues against the pessimism that some have about estimates in the 2.9%-tax-reduction budget that I submitted for a vote this week at the financial town referendum [FTR]).  But the introduction of the topic of sports betting has broader implications:

Also this week, the United States Supreme Court “struck down a 1992 federal law… that effectively banned commercial sports betting in most states,” as a New York Times article put it.  Expecting this outcome, Rhode Island Governor Gina Raimondo had already included a provision in her proposed budget for the upcoming fiscal year suggesting that referendum votes across the state and in Lincoln and Tiverton had already provided authority for the state to conduct sports betting.  She estimated $23.5 million for the state from this source.

However, no language yet exists describing whether this betting would count as a VLT, table game, or something else.  Therefore, although Rhode Island is apparently planning to allow only in-person betting, probably at the two Twin Rivers locations, how much the host communities would receive from these transactions is not yet known.  State officials are coy on the matter, even on the way in which the $23.5 million estimate was calculated, but it is clear that negotiations are underway.

I haven’t been able to find any evidence of how the state thinks this money should be attributed or any calculation that led the governor to estimate her millions, even after communicating with multiple state departments.

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Questions of Who Wants to “Save Tiverton” from a Casino

By way of a preface, I’d note that I believe campaign finance laws to be an unconstitutional infringement on citizens’ rights, and on the matter of a casino in Tiverton, I’m ultimately ambivalent (though my being so upsets some folks, locally).  My opposition to gambling, generally, has mainly to do with the fact that it’s become a means for government to profit from a formerly illegal activity, but if Tiverton gets in on that game, the revenue better go toward tax relief.

The preface notwithstanding, the following snippet from a Jennifer Bogdan article in yesterday’s Providence Journal caught my attention.  The article is about local clergy’s decision to part ways with a group calling itself “Save Tiverton” because of the secrecy of its backers.

Save Tiverton has not filed any campaign expenditure documents with the state Board of Elections, which would be required if the group spent money. Richard Thornton, the board’s campaign finance director, said no complaints about the group have been received. …

To his knowledge, [Holy Trinity Episcopal Church’s Rev. John] Higginbotham said, the backers haven’t spent any money or done any fundraising despite promising a funding stream.

What’s eye-catching is that some significant number of Tiverton residents appears to have received two-page mailers promoting a meeting and providing a sheet of “myths” (PDF).  The photocopied sheets came in a nondescript envelope, with no indications of individuals behind Save Tiverton.  Notably, the return address is 1956 Main Rd., which is the address of Rev. Higginbotham’s church.  More notably, perhaps, the bulk-rate stamp permit is provided through Hingham, Massachusetts, up on the bay next to Quincy.

While it’s certainly possible to conduct printing and mailing entirely by Internet and phone, Hingham would be a bit far for local interests to drive if they had to deliver printouts.  It is, however, closer to Taunton and Everette, two pending locations for casinos in Massachusetts that the Save Tiverton myth sheet notes are creating “saturation” in the local gambling market.

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Tiverton Casino, 2 of 20 Things to Know

Ian Donnis’s weekly TGIF column highlights Twin River’s plans for a casino in Tiverton twice, once from the state’s perspective, and once from the town’s:

The parent company of Twin River may have pulled an ace when it unveiled a plan Monday to transfer gambling from Newport Grand and expand it at a new site on 45 undeveloped acres in northern Tiverton, a dice throw from the Massachusetts border. With Newport remaining unwilling to add table games, a so-called convenience casino in Tiverton may be the most pragmatic option for protecting Rhode Island’s third-largest source of state revenue.

The local perspective comes via a “dispatch” from me, which Ian juxtaposes with John Loughlin’s comments.

I’d only add this, after another day of conversations: The casino proposal appears to be much less controversial, locally, than the Tiverton Glen “multi-use development” proposed a few miles south on the highway.

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Early Thoughts on a Tiverton Casino

Rumors permeated among Tiverton’s politically active residents, last night, that some big news would be coming today.  I joked to my friends that the town planned to secede to Massachusetts and move the planned Fall River to Tiverton.

As it turned out, that joke was a bit like splitting the zeros on a roulette table.

News is out — see here and here, for examples — that Twin River Management Group has plans to move its Newport Grand facility to Tiverton, along Stafford Rd. directly on the other side of Rt. 24 from an area of Fall River, Massachusetts, that is heavily developed with retail businesses.

Continue reading on Tiverton Fact Check.

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RI’s Bad Decisions and Burning Money Instead of Tobacco

My op-ed in today’s Providence Journal places the match of Rhode Island’s experience of the tobacco settlement money (a one-time-fix turned bad debt) on the pile of bad decisions that the state government has made in the past decade or so:

According to a review by ProPublica, Rhode Island has just refinanced some of the resulting debt, with the expectation that “the deal would shave $700 million off a $2.8 billion tab due on the bonds in 2052.” In that regard, it’s a bit like the state’s pension reform, which was marketed as salvation but merely shaved about $3 billion from $9 billion of unfunded liability.

The people who operate Rhode Island’s government are racking up quite a list of these liabilities.

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RI’s Bad Decisions and Burning Money Instead of Tobacco

My op-ed in today’s Providence Journal places the match of Rhode Island’s experience of the tobacco settlement money (a one-time-fix turned bad debt) on the pile of bad decisions that the state government has made in the past decade or so:

According to a review by ProPublica, Rhode Island has just refinanced some of the resulting debt, with the expectation that “the deal would shave $700 million off a $2.8 billion tab due on the bonds in 2052.” In that regard, it’s a bit like the state’s pension reform, which was marketed as salvation but merely shaved about $3 billion from $9 billion of unfunded liability.

The people who operate Rhode Island’s government are racking up quite a list of these liabilities.

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