Top Harrah's Official: RI Blew its Chance on Casino

Top Harrah's Official: RI Blew its Chance on Casino

With Rhode Island poised to lose millions in gaming revenue when three resort-style casinos and a slot parlor are built in Massachusetts, a top gaming official is saying the state missed its opportunity to get ahead of the curve five years ago when voters rejected the proposed casino in West Warwick.

Jan Jones, Senior Vice President of Communications & Government Relations for Caesars Entertainment Corporation and the former Mayor of Las Vegas, told GoLocalProv Monday that when Rhode Island had the chance to open its own resort-style casino, special interests got in the way.

“They had it all,” Jones said. “Rhode Island was a wonderful destination. They could have had it up and running by now. But they threw it all away."

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In 2006, Jones helped lead the charge on a $12 million campaign in the Ocean State for Harrah’s Entertainment, which was hoping to partner with the Narragansett Indian tribe to open a casino in West Warwick, a town now struggling to remain afloat amid a massive unfunded pension liability.

The measure barely passed in West Warwick, but was overwhelmingly shot down statewide.

Chafee: We are Prepared for Competition

But now there is a heightened sense of urgency in the state after the Massachusetts House and Senate approved a plan to open four gaming establishments in the Bay State, a proposal that is expected to generate hundreds of millions of dollars in revenue. Governor Deval Patrick could sign the bill into law as soon as Tuesday.

During the last General Assembly session, the House and Senate approved a plan to allow a referendum on next year’s ballot asking voters to decide whether table games such as poker, blackjack and craps should be allowed at Twin River.

But if Massachusetts expedites the process of building the resort-style casinos, gaming and economic experts say Rhode Island, which generates about $300 million a year from gaming revenue, could be left behind, a proposition that has Governor Chafee concerned. Last week, Chafee said the state is considering proposals from seven potential vendors hoping to conduct an economic impact study to better identify just how much the state stands to lose to its New England competitors.

“We are prepared for competition – whether it comes from Massachusetts, Connecticut, or New Hampshire – and I remain fully committed to protecting this vital source of revenue,” Chafee said.

Mass Casinos Would Crush Rhode Island

According to Clyde Barrow, director of the Center for Policy Analysis at UMass-Dartmouth who has long advocated for gaming in Massachusetts, the fiscal impact on Rhode Island of expanded gambling in Massachusetts could be dire for taxpayers.

“Massachusetts residents now account for more than half of all visitations to Twin River and Newport Grand, and they almost certainly account for a similar proportion of spending,” Barrow told GoLocalProv in September. “These are mostly convenience gamblers, who will almost immediately shift their spending to closer gaming venue if one becomes available. Thus, depending on where Massachusetts locates its gaming venues, Rhode Island could lose approximately $100 to $150 million annually in tax revenues that are now generated by its two slot parlors.”

Dr. Ed Mazze, Distinguished University Professor of Business Administration at the University of Rhode Island, said the state simply cannot afford to let Massachusetts sweep in and take a significant chunk of gaming revenue from the state.

“Rhode Island depends on almost $280 million a year in gambling revenue to support the state's operational expenses,” Mazze said. “We will lose as much as 25% of this revenue as soon as Massachusetts has their gambling venues in operation unless Rhode Island takes some immediate action to compete with these new facilities. We will lose Rhode Island jobs for those in employment sectors that will be needed to build, manage and maintain the new casinos in Massachusetts. “

General Assembly Leadership: We’re Monitoring Everything

Mazze predicts that the state's hospitality industry will be hurt the most, noting that any decrease in tourism to the Ocean State will cost more jobs. He said the state has lost over 29,000 jobs since 2005 and that experts aren’t predicting any real job creation until 2015.

Senate spokesman Greg Pare said Senate President M. Teresa Paiva Weed is monitoring the developments in the Bay State.

“The General Assembly has passed legislation asking voters in the November 2012 election whether Twin River should be permitted to operate table games,” Pare said. “Comprehensive analysis and evaluation will take place during the 2012 session. In the meantime we will continue to monitor developments in Massachusetts.”

House Speaker Gordon Fox said all the focus recently has been on pension reform, but he expects casino gaming to be a priority during the next legislative session.

“We have been closely monitoring the expansion of gaming in Massachusetts, which is why the General Assembly voted to place the referendum on the ballot next November,” Fox said. “All of our energy and focus has been placed on the very critical issue of pension reform this fall. However, during the next legislative session, we will discuss the terms and conditions under which casino gaming would be operated in the state if it is authorized by the voters.”

RI Needs a Destination

But it may be too late. While voters have to wait a year simply to approve table gaming, Massachusetts will already be moving toward destination-type gaming establishments, something Jones said Rhode Island desperately needs.

“Rhode Island doesn’t have a destination,” Jones said. “They having gaming product, but they don’t have hotels.”

Jones acknowledged that she still monitors what is happening in the state, but said the state is at risk of falling behind.

“[2006] was a big missed opportunity,” Jones said. “They had every opportunity to get it done.”

Editor’s Note: GoLocalProv CEO and co-founder Josh Fenton was a paid consultant for Harrah’s Entertainment.

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