Dicey Game Being Played by Voters and Lawmakers

The existing casinos in southern New England feature nearly 18,000 slot machines and virtual table games. (istock)

The existing casinos in southern New England feature nearly 18,000 slot machines and virtual table games. (istock)

Southern New England is betting on a build up of casinos to grow the economy and create jobs, but is this gamble going to pay off for the region?

By PEARL MACEK/ecoRI News contributor

NEWPORT, R.I. — Walk through the automated doors at the Newport Grand Casino and the cacophonic sound of more than 1,000 slot machines greets you. As your ears become accustomed to the multiple layers of sounds, an inundation of vivid purples, blues, reds and yellows flash before you as each machine tries to entice potential players.

Slot machines called “Lucky Larry’s Lobstermania,” “Sex and the City” and “Cleopatra” seem innocent enough, but after you insert your money, a digital message gives you a hotline number to call if your gambling has become problem. Nearby, virtual blackjack dealers, big-breasted women with smiling faces, wait patiently inside their respective screens for real players.

It’s a Thursday evening and the crowd, mostly an elderly one, sits before colorful screens waiting to hit the jackpot. On this particular night, however, the casino isn’t anywhere near capacity, which is probably one of the reasons that the Twin River Management Group (TRMG) wants to close it.

TRMG operates Twin River Casino in Lincoln, a Hard Rock Hotel in Biloxi, Miss., and Arapahoe Park, a horse-racing track in Colorado. The management group officially announced that it had acquired Newport Grand last July, but it was already public knowledge that the company would seek to move Newport Grand’s gaming license to a new site, possibly in Tiverton, which seemed more open to hosting a destination casino.

“When we acquired Newport Grand we acquired it not thinking we would be able to do many things with it other than operate it as it was,” said John E. Taylor Jr., chairman of the board of directors of Twin River Worldwide Holdings, the parent company of TRMG, during a recent phone interview with ecoRI News. “But we wanted to see if there was a possibility that there was another community in a more advantageous location that might consider hosting a facility like this.”

Table games are considered by the gaming world as a vital way of attracting a larger, younger demographic, but twice Rhode Island voters, particularly Newport voters, said “no” to table games at Newport Grand. It seems the last majority “no” vote, in 2014, sealed Newport Grand’s fate.

An artist’s rendering of what the proposed Tiverton, R.I., casino would look like: a two-story, 85,000-square-foot facility with an attached 84-room hotel and 1,100 surface parking spaces. (TRMG)

An artist’s rendering of what the proposed Tiverton, R.I., casino would look like: a two-story, 85,000-square-foot facility with an attached 84-room hotel and 1,100 surface parking spaces. (TRMG)

Gambling with economy
The fiscal 2015 financial report of the Lottery Division of Rhode Island’s Department of Revenue states that $516,262,400 in revenue was generated by video lottery (slot) machines and $106,640,942 was generated by table games. Together, they make up 71.9 percent of the gaming industry in Rhode Island, which brought in a total of $867,054,081 during the last fiscal year.

Rhode Island’s gaming industry is the state’s third-largest revenue source.

Throughout the spring and summer of 2015, TRMG held a series of talks and charrettes in Tiverton to explain to residents the company’s design plans for the proposed casino. According to Taylor, residents seemed receptive to the idea.

“We thought that the market could support 1,000 machines, comparable to the number that they have at Newport Grand, and we thought about 30 table games could be supported,” he said. “But what we told the residents is that we’re having this conversation to see what else you would feel comfortable with.”

In early November of last year, TRMG presented its plan to the Tiverton Town Council: a two-story, 85,000-square-foot facility with an attached 84-room hotel and 1,100 surface parking spaces. The proposed casino would be set on 23 acres on a 45-acre parcel just off Stafford Road and 400 feet from the Massachusetts border.

From this location, it’s a 50-minute drive to Plainridge Park Casino in Plainville, Mass., and 30 and 43 minutes from Taunton and Brockton, respectively, where two casinos are slated to be built. A $1.7 billion Wynn Boston Harbor casino in Everett also has been proposed.

Taylor said TRMG isn’t too worried about the possibility of three more casinos opening in the area. “Convenience is critical,” he said. “The more convenient that we can make it for people to get to, the better.”

The proposed Tiverton casino would employ between 525 and 600 employees, according to Taylor, and all of Newport Grand’s 175 employees would have the opportunity to work at the casino in Tiverton.

Voters to decide
Earlier this year, both chambers of the General Assembly overwhelmingly approved legislation to give Rhode Island residents the opportunity to vote for or against a Tiverton casino. The legislation was signed by Gov. Gina Raimondo the next day. Questions regarding the casino will be put on the November ballot. The proposal will have to receive a majority “yes” vote from both state voters and Tiverton residents.

Should the ballot questions win approval, the state would receive 15.5 percent of table revenues and 61 percent of video-lottery terminals (VLTs), from both from the new Tiverton casino and Twin River. The legislation would also guarantee each host community $3 million annually from the casinos.

“They (casinos) have been, up to this point, considered to be a real success story, but I do consider the fact that they are such a large part of our state’s revenue to be a real issue for worry and to some extent, a failure of Rhode Island to really get its growth-oriented sectors going,” said Leonard Lardaro, an economics professor at the University of Rhode Island. “What we’re looking at, and I think it is important to put it in this context, is that the gambling industry is very over supplied, very, very oversupplied.”

Patrick Kelly is the chair of the department of accountancy at Providence College. He has studied casinos and their social and economic effects, specifically in the southeastern Connecticut region. Kelly said that in the coming years “there is going to be a lot more commitment to casinos for revenue and jobs,” not just in the Northeast but throughout the United States. He said that is a concern.

By 2018 he expects to see some 60 casinos along the Route 95 corridor between Maine and Maryland, including three or four in Massachusetts, two in Rhode Island and two or three in Connecticut. Kelly said this will ultimately lead to market saturation, but a greater concern of his are the social costs related to having so many casinos, such as problem gambling and an increase in criminal behavior to support gambling addiction.

About 3 percent of the U.S. population is addicted to gambling, while others are hooked by the lure of tax revenue and an economic rescue. (istock)

About 3 percent of the U.S. population is addicted to gambling, while others are hooked by the lure of tax revenue and an economic rescue. (istock)

Addicted to gambling
Tawny Solmere is the director of Problem Gambling Services of Rhode Island (PGSRI). She said that between 1 percent and 3 percent of the U.S. population has a gambling problem, “so that means, with the census of Rhode Island, that we are looking at between 10,000 and 30,00 people” who have problems with gambling.

PGSRI is a hotline service. When people call, they are referred to a counselor at one of the six behavioral health-care clinics run by the nonprofit CODAC Behavioral Healthcare. The lottery subsidizes PGSRI, but Solmere said more help from the state would be welcomed, especially if the casino industry continues to expand.

She noted that co-dependencies, such as drug and alcohol abuse, tend to accompany gambling addiction. But there is an aspect to problem gambling that is particularly egregious. “This disorder, problem gambling, has the highest rate of suicide than any other addiction,” Solmere said.

Solmere said PGSRI and CODAC are neither for nor against casinos, but she is worried that unless more is done to help those with gambling addiction, the situation could easily spiral out of control.

“If we don’t get the resources to meet that need, Rhode Island is going to have an epidemic equal to the heroin epidemic we are looking at now,” she said. “It’s a scary prospect.”

Rep. John Edwards, D-Tiverton, said building the casino in Tiverton “just makes sense” and will offer local residents a large number of employment opportunities. As far as gambling addiction, he said, “You worry a little bit about that,” but, “if they are going to gamble, they are going to gamble somewhere.

“I think that it will be an asset for the Tiverton and the whole East Bay area.”

George Medeiros, a longtime Tiverton resident and owner of Tiverton Sign Shop, agreed. “It’s just something for this area,” he said during a recent phone interview. He noted that there is little to attract people to Tiverton, and for it’s residents, there are few dining and entertainment options.

“For me to get a pizza right now, I would have to go to Fall River or the other side of Tiverton,” Medeiros said.

He said he isn’t worried about traffic congestion, as the casino will be located just off the Route 24 ramp, and according to a TRMG press release from November 2015, the Rhode Island Department of Transportation is planning to build a roundabout on Canning Boulevard with a dedicated turn lane into the proposed casino.

The only thing that worries Medeiros is if the proposed casino in Taunton opens before the Tiverton casino. “They might not be fast enough,” he said.

Brett Pelletier is a member of the Tiverton Town Council and the only one to oppose putting questions about the casino on the November ballot. He also was the only council member to respond to an ecoRI News request for comment.

Pelletier, who is a real-estate analyst with a consulting firm in Boston, was appointed to a Town Council subcommittee to vet the casino legislation and provide feedback before it went to the General Assembly.

“Every time that the meeting was meant to take place, it was canceled for one reason or another,” he said. “We never actually met.”

In regards to Rhode Island’s dependency on the gaming industry, Pelletier said, “I think that it’s an atrocious way to run a government, preying on people who have an unjustified hope that they will strike it rich at a casino.”

Economic impact
The Brockton and Taunton casinos are scheduled to be built by the end of 2018. TRMG has taken the possibility of those facilities opening by then into consideration in its gaming market study.

The company has included four different scenarios, including the Brockton casino entering the market but Taunton doesn’t. The report estimates $127.6 million in revenue if that were to happen. If neither of those casinos opened, the report estimates $147.9 million in revenue for the Tiverton facility.

TRMG has worked closely with the Rhode Island Department of Environmental Management to identify developable land, according to the company, and it hired the firm Natural Resources Services Inc. to suggest mitigation plans for any adverse impact on local wildlife.

Rachel Calabro, a community organizer at Save The Bay, said the Providence-based nonprofit has yet to look deeply into the possible environmental effects of a Tiverton casino. She has seen the plans for the site and suggested that they reduce the amount of parking surface area by building a garage instead. The amount of concrete surface space initially suggested for the casino could lead to serious flooding issues, Calabro said.

She also suggested the installation of solar panels.

Casinos in Tiverton, Taunton and Brockton could certainly become go-to destinations, but the continued reliance on this revenue raises legitimate questions: Can the Rhode Island gaming industry continue to be a leading revenue source given the inevitable construction of more casinos in Connecticut and Massachusetts? Will the gaming industry last and will it be worth the social costs?