IGT and Twin River to Announce Lottery Deal on Thursday

IGT and Twin River to Announce Lottery Deal on Thursday

In a joint statement issued by IGT and Twin River -- the two gaming companies that have been battling over the past few months -- it was announced that they have developed a proposal as to how the two may be able to work together.

 

“Our discussions have centered on a framework to better support Rhode Island’s third-largest source of revenue. On Thursday IGT and Twin River will hold a joint news conference to address these matters,” said the companies.

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On Monday, the Speaker of the House Nick Mattiello’s office released a study that the legislature had commissioned by Christiansen Capital Advisors.

Asked if Mattiello has reviewed the report, “Not at this time.  He hasn’t had the opportunity to fully review it yet,” said Mattiello spokesperson Larry Berman.

“We have received just today the gaming study conducted by Christiansen Capital Advisors and on its surface, many of the issues highlighted in the report were addressed during the committee process last year,” said IGT and Twin River in their statement.

“It’s worthy of note that the study doesn’t consider the economic impact of IGT’s job commitment, nor does it offer suggestions for strengthening Rhode Island’s competitive gaming positioning,” added the company.

Central to the discussion of the critical role IGT plays in Rhode Island and their role going forward as the lottery provider is that the company has committed to keep 1,100 jobs in Rhode Island with annual compensation in excess of $100,000.

The report fails to measure the impact of the IGT jobs to RI.

The report finds in part:

Finally, as also described in this report, CCA has never recommended to any of the lotteries we have served that a twenty-year contract is a good idea. A ten-year initial contract term, with optional extensions, has been a standard recommendation from CCA for the last 15 years.

In 2020, however, we believe that this is even more urgent. The primary reasoning behind a ten-year term is to mitigate the impact of a lottery getting caught between technology changes. While it is true that changes in lottery technology tend to be more evolutionary than revolutionary, and many existing systems are approaching 20 with only minor upgrades, that is really about the limit of their useful lives. A ten-year term gives the lottery flexibility to survey the technology of the times and then determine whether a system upgrade is necessary.

Some might suggest that they have essentially the same thing in the new Master Contract by requiring that IGT upgrade the system in ten years’ time. Maybe, but you are still locked into one supplier. IGT/GTech has been an industry leader in lottery technology for over 30 years, and we would agree that that is not likely to change over the next ten. However, it is still possible that IGT could fall behind in new payment systems or other technologies that the Rhode Island Lottery may wish to adopt in the future. It may be a relatively small risk, but one that could have significant implications for Rhode Island and Rhode Island taxpayers