2017 -- S 0367

========

LC001711

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

____________

A N   A C T

RELATING TO THE STATE-OPERATED GAMING FACILITIES IN LINCOLN, NEWPORT,

AND, WHEN OPERATIONS COMMENCE, IN TIVERTON

     Introduced By: Senators Goodwin, Ciccone, Crowley, Felag, and Kettle

     Date Introduced: February 28, 2017

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Purpose. The general assembly hereby finds that:

     (a) The Twin River gaming facility in the town of Lincoln, the Newport Grand gaming

facility in the town of Newport, and, once operational, the gaming facility owned by Twin River-

Tiverton in the town of Tiverton (the "Tiverton Gaming Facility," and, collectively with the other

(2) two gaming facilities, the "Gaming Facilities") are important sources of revenue for the state

of Rhode Island. Indeed, revenues generated from state-operated gaming in Rhode Island

constitute the third largest source of revenue to the state, behind only revenue generated from

income taxes and sales and use taxes.

     (b) In an increasingly competitive gaming market, it is imperative that action be taken to

preserve and protect the state's ability to maximize revenues at the Facilities, and in particular to

expand critical revenue-driving promotional and marketing programs through legislative

authorization and necessary amendments to contracts, previously authorized by the general

assembly, to position the promotional and marketing programs for long-term success.

     (c) Accordingly, the purpose of this act is to help enhance the revenues generated by the

Facilities in order to maximize the public's share of revenue generated by them for the state of

Rhode Island. It is the intent of the general assembly that this act, being necessary for the welfare

of the state and its citizens, be liberally construed so as to effectuate its purposes, including

without limitation, the State's attempt to enhance the ability of the Facilities to generate revenue.

The inclusion of the Tiverton Gaming Facility within the scope of this act is based on the

fulfilment in 2016 of the requirements of Article VI, Section 22 of the Rhode Island Constitution

with respect to that facility, namely that:

     (i) The Rhode Island secretary of state has certified that the qualified voters of the state

have approved authorizing a facility owned by Twin River-Tiverton located at the intersection of

William S. Canning Boulevard and Stafford Road in the town of Tiverton to be licensed as a pari-

mutuel facility and offer state-operated video lottery games and state-operated casino gaming,

such as table games; and

     (ii) The board of canvassers of the town of Tiverton has certified that the qualified

electors of the town of Tiverton have approved authorizing a facility owned by Twin River-

Tiverton located at the intersection of William S. Canning Boulevard and Stafford Road in the

town of Tiverton to be licensed as a pari-mutuel facility and offer state-operated video lottery

games and state-operated casino gaming, such as table games.

     SECTION 2. Section 42-61.2-7 of the General Laws in Chapter 42-61.2 entitled "Video-

Lottery Terminal" is hereby amended to read as follows:

     42-61.2-7. Division of revenue.

     (a) Notwithstanding the provisions of §42-61-15, the allocation of net, terminal income

derived from video-lottery games is as follows:

     (1) For deposit in the general fund and to the state lottery division fund for administrative

purposes: Net, terminal income not otherwise disbursed in accordance with subdivisions (a)(2) --

(a)(6) inclusive, or otherwise disbursed in accordance with subsections (g)(2) and (h)(2);

     (i) Except for the fiscal year ending June 30, 2008, nineteen one hundredths of one

percent (0.19%), up to a maximum of twenty million dollars ($20,000,000), shall be equally

allocated to the distressed communities as defined in §45-13-12 provided that no eligible

community shall receive more than twenty-five percent (25%) of that community's currently

enacted municipal budget as its share under this specific subsection. Distributions made under

this specific subsection are supplemental to all other distributions made under any portion of

general laws §45-13-12. For the fiscal year ending June 30, 2008, distributions by community

shall be identical to the distributions made in the fiscal year ending June 30, 2007, and shall be

made from general appropriations. For the fiscal year ending June 30, 2009, the total state

distribution shall be the same total amount distributed in the fiscal year ending June 30, 2008, and

shall be made from general appropriations. For the fiscal year ending June 30, 2010, the total

state distribution shall be the same total amount distributed in the fiscal year ending June 30,

2009, and shall be made from general appropriations, provided, however, that seven hundred

LC001711 - Page 2 of 15

eighty-four thousand four hundred fifty-eight dollars ($784,458) of the total appropriation shall

be distributed equally to each qualifying distressed community. For each of the fiscal years

ending June 30, 2011, June 30, 2012, and June 30, 2013, seven hundred eighty-four thousand four

hundred fifty-eight dollars ($784,458) of the total appropriation shall be distributed equally to

each qualifying distressed community.

     (ii) Five one hundredths of one percent (0.05%), up to a maximum of five million dollars

($5,000,000), shall be appropriated to property tax relief to fully fund the provisions of §44-33-

2.1. The maximum credit defined in subdivision 44-33-9(2) shall increase to the maximum

amount to the nearest five dollar ($5.00) increment within the allocation until a maximum credit

of five hundred dollars ($500) is obtained. In no event shall the exemption in any fiscal year be

less than the prior fiscal year.

     (iii) One and twenty-two one hundredths of one percent (1.22%) to fund §44-34.1-1,

entitled "Motor Vehicle and Trailer Excise Tax Elimination Act of 1998", to the maximum

amount to the nearest two hundred fifty dollar ($250) increment within the allocation. In no event

shall the exemption in any fiscal year be less than the prior fiscal year.

     (iv) Except for the fiscal year ending June 30, 2008, ten one hundredths of one percent

(0.10%), to a maximum of ten million dollars ($10,000,000), for supplemental distribution to

communities not included in subsection (a)(1)(i) distributed proportionately on the basis of

general revenue sharing distributed for that fiscal year. For the fiscal year ending June 30, 2008,

distributions by community shall be identical to the distributions made in the fiscal year ending

June 30, 2007, and shall be made from general appropriations. For the fiscal year ending June 30,

2009, no funding shall be disbursed. For the fiscal year ending June 30, 2010, and thereafter,

funding shall be determined by appropriation.

     (2) To the licensed, video-lottery retailer:

     (a) (i) Prior to the effective date of the Newport Grand Master Contract, Newport Grand

twenty-six percent (26%), minus three hundred eighty-four thousand nine hundred ninety-six

dollars ($384,996);

     (ii) On and after the effective date of the Newport Grand Master Contract, to the licensed,

video-lottery retailer who is a party to the Newport Grand Master Contract, all sums due and

payable under said Master Contract, minus three hundred eighty-four thousand nine hundred

ninety-six dollars ($384,996).

     (iii) Effective July 1, 2013, the rate of net, terminal income payable to the licensed,

video-lottery retailer who is a party to the Newport Grand Master Contract shall increase by two

and one quarter percent (2.25%) points. The increase herein shall sunset and expire on June 30,

LC001711 - Page 3 of 15

2015, and the rate in effect as of June 30, 2013, shall be reinstated.

     (iv) (A) Effective July 1, 2015, the rate of net, terminal income payable to the licensed,

video-lottery retailer who is a party to the Newport Grand Master Contract shall increase over the

rate in effect as of June 30, 2013, by one and nine-tenths (1.9) percentage points. (i.e., x% plus

1.9 percentage points equals (x + 1.9)%, where "x%" is the current rate of net terminal income

payable to the licensed, video-lottery retailer who is a party to the Newport Grand Master

Contract). The dollar amount of additional net, terminal income paid to the licensed, video-lottery

retailer who is a party to the Newport Grand Master Contract with respect to any Newport Grand

Marketing Year as a result of such increase in rate shall be referred to as "Additional Newport

Grand Marketing NTI."

     (B) The excess, if any, of marketing expenditures incurred by the licensed, video-lottery

retailer who is a party to the Newport Grand Master Contract with respect to a Newport Grand

Marketing Year over one million four hundred thousand dollars ($1,400,000) shall be referred to

as the "Newport Grand Marketing Incremental Spend." Beginning with the Newport Grand

Marketing Year that starts on July 1, 2015, after the end of each Newport Grand Marketing Year,

the licensed, video-lottery retailer who is a party to the Newport Grand Master Contract shall pay

to the Division the amount, if any, by which the Additional Newport Grand Marketing NTI for

such Newport Grand Marketing Year exceeds the Newport Grand Marketing Incremental Spend

for such Newport Grand Marketing Year; provided however, that such video-lottery retailer's

liability to the Division hereunder with respect to any Newport Grand Marketing Year shall never

exceed the Additional Newport Grand Marketing NTI paid to such video-lottery retailer with

respect to such Newport Grand Marketing Year.

     The increase in subsection 2(a)(iv) shall sunset and expire on June 30, 2017 upon the

commencement of the operation of casino gaming at Twin River-Tiverton's facility located in the

town of Tiverton, and the rate in effect as of June 30, 2013 shall be reinstated.

     (b) (i) Prior to the effective date of the UTGR master contract, to the present, licensed,

video-lottery retailer at Lincoln Park, which is not a party to the UTGR, master contract, twenty-

eight and eighty-five one hundredths percent (28.85%), minus seven hundred sixty-seven

thousand six hundred eighty-seven dollars ($767,687);

     (ii) On and after the effective date of the UTGR master contract, to the licensed, video-

lottery retailer that is a party to the UTGR master contract, all sums due and payable under said

master contract minus seven hundred sixty-seven thousand six hundred eighty-seven dollars

($767,687).

     (3) (i) To the technology providers that are not a party to the GTECH Master Contract as

LC001711 - Page 4 of 15

set forth and referenced in PL 2003, CH. 32, seven percent (7%) of the net, terminal income of

the provider's terminals; in addition thereto, technology providers that provide premium or

licensed proprietary content or those games that have unique characteristics, such as 3D graphics;

unique math/game play features; or merchandising elements to video-lottery terminals may

receive incremental compensation, either in the form of a daily fee or as an increased percentage,

if all of the following criteria are met:

     (A) A licensed, video-lottery retailer has requested the placement of premium or licensed

proprietary content at its licensed, video-lottery facility;

     (B) The division of lottery has determined in its sole discretion that the request is likely to

increase net, terminal income or is otherwise important to preserve or enhance the competiveness

of the licensed, video-lottery retailer;

     (C) After approval of the request by the division of lottery, the total number of premium

or licensed, proprietary-content video-lottery terminals does not exceed ten percent (10%) of the

total number of video-lottery terminals authorized at the respective licensed, video-lottery

retailer; and

     (D) All incremental costs are shared between the division and the respective licensed,

video-lottery retailer based upon their proportionate allocation of net terminal income. The

division of lottery is hereby authorized to amend agreements with the licensed, video-lottery

retailers, or the technology providers, as applicable, to effect the intent herein.

     (ii) To contractors that are a party to the master contract as set forth and referenced in PL

2003, CH. 32, all sums due and payable under said master contract; and

     (iii) Notwithstanding paragraphs (i) and (ii), there shall be subtracted proportionately

from the payments to technology providers the sum of six hundred twenty-eight thousand seven

hundred thirty-seven dollars ($628,737).

     (4) (A) Until video-lottery games are no longer operated at the Newport Grand gaming

facility located in Newport, to the city of Newport one and one hundredth percent (1.01%) of net

terminal income of authorized machines at Newport Grand, except that effective November 9,

2009, until June 30, 2013, the allocation shall be one and two tenths percent (1.2%) of net

terminal income of authorized machines at Newport Grand for each week the facility operates

video-lottery games on a twenty-four-hour (24) basis for all eligible hours authorized; and

     (B) Upon commencement of the operation of video-lottery games at Twin River-

Tiverton's facility located in the town of Tiverton, to the town of Tiverton one and forty-five

hundredths percent (1.45%) of net terminal income of authorized machines at the licensed, video-

lottery retailer's facility located in the town of Tiverton, subject to subsection (g)(2); and

LC001711 - Page 5 of 15

     (C) To the town of Lincoln, one and twenty-six hundredths percent (1.26%) of net

terminal income of authorized machines at Twin River except that:

     (i) Effective November 9, 2009, until June 30, 2013, the allocation shall be one and forty-

five hundredths percent (1.45%) of net terminal income of authorized machines at Twin River for

each week video-lottery games are offered on a twenty-four-hour (24) basis for all eligible hours

authorized; and

     (ii) Effective July 1, 2013, provided that the referendum measure authorized by PL 2011,

Ch. 151, Sec. 4, is approved statewide and in the Town of Lincoln, the allocation shall be one and

forty-five hundredths percent (1.45%) of net terminal income of authorized video-lottery

terminals at Twin River, subject to subsection (h)(2); and

     (5) To the Narragansett Indian Tribe, seventeen hundredths of one percent (0.17%) of net

terminal income of authorized machines at Lincoln Park, up to a maximum of ten million dollars

($10,000,000) per year, that shall be paid to the Narragansett Indian Tribe for the account of a

Tribal Development Fund to be used for the purpose of encouraging and promoting: home

ownership and improvement; elderly housing; adult vocational training; health and social

services; childcare; natural resource protection; and economic development consistent with state

law. Provided, however, such distribution shall terminate upon the opening of any gaming facility

in which the Narragansett Indians are entitled to any payments or other incentives; and provided,

further, any monies distributed hereunder shall not be used for, or spent on, previously contracted

debts; and

     (6) Unclaimed prizes and credits shall remit to the general fund of the state; and

     (7) Payments into the state's general fund specified in subsections (a)(1) and (a)(6) shall

be made on an estimated monthly basis. Payment shall be made on the tenth day following the

close of the month except for the last month when payment shall be on the last business day.

     (b) Notwithstanding the above, the amounts payable by the division to UTGR related to

the marketing program described in the UTGR master contract (as such may be amended from

time to time) shall be paid on a frequency agreed by the division, but no less frequently than

annually.

     (c) Notwithstanding anything in this chapter 61.2 of this title to the contrary, the director

is authorized to fund the marketing program as described above in regard to in the UTGR master

contract.

     (d) Notwithstanding the above, the amounts payable by the division to the licensed,

video-lottery retailer who is a party to the Newport Grand Master Contract related to the

marketing program described in the Newport Grand Master Contract (as such may be amended

LC001711 - Page 6 of 15

from time to time) shall be paid on a frequency agreed by the division, but no less frequently than

annually.

     (e) Notwithstanding anything in this chapter 61.2 of this title to the contrary, the director

is authorized to fund the marketing program as described above in regard to in the Newport

Grand Master Contract.

     (f) Notwithstanding the provisions of §42-61-15, but subject to §42-61.2-7(h), the

allocation of net, table-game revenue derived from table games at Twin River is as follows:

     (1) For deposit into the state lottery fund for administrative purposes and then the balance

remaining into the general fund:

     (i) Sixteen percent (16%) of net, table-game revenue, except as provided in §42-61.2-

7(f)(1)(ii);

     (ii) An additional two percent (2%) of net, table-game revenue generated at Twin River

shall be allocated starting from the commencement of table games activities by such table-game

retailer and ending, with respect to such table-game retailer, on the first date that such table-game

retailer's net terminal income for a full state fiscal year is less than such table-game retailer's net

terminal income for the prior state fiscal year, at which point this additional allocation to the state

shall no longer apply to such table-game retailer.

     (2) To UTGR, net, table-game revenue not otherwise disbursed pursuant to subsection

(f)(1); provided, however, on the first date that such table-game retailer's net terminal income for

a full state fiscal year is less than such table-game retailer's net terminal income for the prior state

fiscal year, as set forth in subsection (f)(1)(ii), one percent (1%) of this net, table-game revenue

shall be allocated to the town of Lincoln for four (4), consecutive state fiscal years.

     (g) Notwithstanding the provisions of §42-61-15, the allocation of net, table-game

revenue derived from table games at the Tiverton facility owned by Twin River-Tiverton is as

follows:

     (1) Subject to subsection (g)(2) of this section, one percent (1%) of net, table-game

revenue shall be allocated to the town of Tiverton;

     (2) Fifteen and one-half percent (15.5%) of net, table-game revenue shall be allocated to

the state first for deposit into the state lottery fund for administrative purposes and then the

balance remaining into the general fund; provided however, that beginning with the first state

fiscal year that a facility in the town of Tiverton owned by Twin River-Tiverton offers patrons

video-lottery games and table games for all of such state fiscal year, for that state fiscal year and

each subsequent state fiscal year that such Tiverton facility offers patrons video-lottery games

and table games for all of such state fiscal year, if the town of Tiverton has not received an

LC001711 - Page 7 of 15

aggregate of three million dollars ($3,000,000) in the state fiscal year from net, table-game

revenues and net terminal income, combined, generated by such Tiverton facility, then the state

shall make up such shortfall to the town of Tiverton out of the state's percentage of net, table-

game revenue set forth in this subsection (g)(2) and net terminal income set forth in subsections

(a)(1) and (a)(6); provided further however, if in any state fiscal year either video-lottery games

or table games are no longer offered at a facility in the town of Tiverton owned by Twin River-

Tiverton, LLC, then the state shall not be obligated to make up the shortfall referenced in this

subsection (g)(2); and

     (3) Net, table-game revenue not otherwise disbursed pursuant to subsections (g)(1) and

(g)(2) of this section shall be allocated to Twin River-Tiverton.

     (h) Notwithstanding the foregoing §42-61.2-7(f) and superseding that section effective

upon the first date that a facility in the town of Tiverton owned by Twin River-Tiverton offers

patrons video-lottery games and table games, the allocation of net, table-game revenue derived

from table games at Twin River in Lincoln shall be as follows:

     (1) Subject to subsection (h)(2), one percent (1%) of net, table-game revenue shall be

allocated to the town of Lincoln;

     (2) Fifteen and one-half percent (15.5%) of net, table-game revenue shall be allocated to

the state first for deposit into the state lottery fund for administrative purposes and then the

balance remaining into the general fund; provided however, that beginning with the first state

fiscal year that a facility in the town of Tiverton owned by Twin River-Tiverton offers patrons

video-lottery games and table games for all of such state fiscal year, for that state fiscal year and

each subsequent state fiscal year that such Tiverton facility offers patrons video-lottery games

and table games for all of such state fiscal year, if the town of Lincoln has not received an

aggregate of three million dollars ($3,000,000) in the state fiscal year from net, table-game

revenues and net terminal income, combined, generated by the Twin River facility in Lincoln,

then the state shall make up such shortfall to the town of Lincoln out of the state's percentage of

net, table-game revenue set forth in this subsection (h)(2) and net terminal income set forth in

subsections (a)(1) and (a)(6); provided further however, if in any state fiscal year either video-

lottery games or table games are no longer offered at a facility in the town of Tiverton owned by

Twin River-Tiverton, LLC, then the state shall not be obligated to make up the shortfall

referenced in this subsection (h)(2); and

     (3) Net, table-game revenue not otherwise disbursed pursuant to subsections (h)(1) and

(h)(2) shall be allocated to UTGR.

     SECTION 3. Except to the extent amended by this act, the terms, conditions, provisions

LC001711 - Page 8 of 15

and definitions of Chapter 322 and 323 of the Public Laws of 2005, Chapter 16 of the Public

Laws of 2010, Chapter 151, Article 25 of the Public Laws of 2011, Chapters 289 and 290 of the

Public Laws of 2012, Chapter 145, Article 13 of the Public Laws of 2014, Chapter 141, Article

11, Sections 16 – 22 of the Public Laws of 2015, and Chapters 005 and 006 of the Public Laws of

2016 (in each case as the more recent law may have amended an earlier law or laws), are hereby

incorporated herein by reference and shall remain in full force and effect.

     SECTION 4. Definitions. For the purposes of this act, the following terms shall have the

following meanings, and to the extent that such terms are otherwise defined in any provision of

the general or public laws (including but not limited to Chapter 16 of the public Laws of 2010, as

amended, and Chapters 005 and 006 of the public laws of 2016), for purposes of this act, those

terms are hereby amended to read as follows:

     (a) "Division" means the division of lotteries within the department of revenue and/or any

successor as party to the UTGR Master Contract and the Newport Grand Master Contract.

     (b) "Initial Promotional Points Program" means, as to UTGR, that promotional points

program authorized in Chapter 16, Section 4(a)(ii) of Part A of the Public Laws of 2010, as

amended by Chapter 151, Article 25, Section 8 of the Public Laws of 2011 and by this act. As to

Newport Grand, "Initial Points Program" means that promotional points program authorized in

Chapter 16, Section 4(a)(ii) of Part B of the Public Laws of 2010, as amended by Chapter 151,

Article 25, Section 8 of the Public Laws of 2011 and by this act.

     (c) "Marketing Program" means, as to UTGR, that marketing program set forth in

Chapter 16, Section 4(a)(iii) of Part A, of the Public Laws of 2010, as amended by Chapter 151,

Article 25, Section 8 of the Public Laws of 2011, and as amended by Chapter 145, Article 13,

Section 5 of the Public Laws of 2014, and as amended by Chapters 005 and 006 of the Public

Laws of 2016, and as clarified by this act. As to Newport Grand, "Marketing Program" means

that marketing program set forth in Chapter 16, Section 4(a)(iii) of Part B of the Public Laws of

2010, as amended by Chapter 151, Article 25, Section 8 of the Public Laws of 2011, and as

amended by Chapters 005 and 006 of the Public Laws of 2016, and as clarified by this act.

     (d) "Marketing Year" means the fiscal year of the state.

     (e) "Newport Grand" when it is referring to a legal entity, means Premier Entertainment

II. LLC and its permitted successors and assigns under the Newport Grand Master Contract.

''Newport Grand," when it is referring to a gaming facility, means Newport Grand Slots, located

at 150 Admiral Kalbfus Road, Newport, Rhode Island, unless and until state-operated video

lottery games are no longer offered at such facility in Newport and state-operated video-lottery

games are offered at a facility owned by Twin River-Tiverton located in Tiverton, Rhode Island,

LC001711 - Page 9 of 15

at which time ''Newport Grand" shall mean such Tiverton facility.

     (f) "Newport Grand Division Percentage" means for any Marketing Year, the Division's

percentage of net terminal income derived from video lottery terminals located at the Newport

Grand facility as set forth in §42-61.2-7.

     (g) "Newport Grand Master Contract" means that certain Master Video Lottery Terminal

Contract made as of November 23, 2005 by and between the Division and Newport Grand, as

amended and/or assigned from time to time in accordance with its terms.

     (h) "Prior Marketing Year" means the prior state fiscal year.

     (i) "Promotional Points " means the promotional points issued pursuant to any free play

or other promotional program operated by the Division at a licensed video lottery terminal facility

(including, without limitation, the Initial Promotional Points Program and Supplementary

Promotional Points Program as to UTGR and the Initial Promotional Points Program and

Supplementary Promotional Points Program as to Newport Grand), which may be downloaded to

a video lottery terminal by a player. Promotional Points are provided to customers and

prospective customers for no monetary charge. Customer registration may be required.

     (j) "Promotional Points Program" means, as to UTGR, the Initial Promotional Points

Program or Supplementary Promotional Points Program applicable to UTGR, and as to Newport

Grand, the Initial Promotional Points Program or Supplementary Promotional Points Program

applicable to Newport Grand.

     (k) "Supplementary Promotional Points Program" means that promotional points program

authorized in Section 8 as to Twin River and Section 9 as to Newport Grand, of Chapters 289 and

290 of the Public Laws of 2012.

     (l) "Twin River-Tiverton" means Twin River-Tiverton LLC, a Delaware Limited

Liability Company. References herein to "Twin River-Tiverton" shall include its permitted

successors and assigns.

     (m) "UTGR" has the meaning given that term in Chapter 16 of the Public Laws of 2010,

Part A, Section 2(n).

     (n) "UTGR Division Percentage" means for any Marketing Year, the Division's

percentage of net terminal income derived from video lottery terminals located at the Twin River

facility as set forth in §42-61.2-7.

     (o) "UTGR Master Contract" means that certain Master Video Lottery Terminal Contract

made as of July 18, 2005 by and between the Division, the Department of Transportation and

UTGR, as amended and/or assigned from time to time in accordance with its terms.

     SECTION 5. Authorized Procurement of Sixth Amendment to the UTGR Master

LC001711 - Page 10 of 15

Contract. Notwithstanding any general or public law, regulation or rule to the contrary, within

ninety (90) days of the enactment of this act, the Division is hereby expressly authorized,

empowered and directed to enter into with UTGR a Sixth Amendment to the UTGR Master

Contract as described in this section 5, to become effective April 1, 2017:

     (a) Amendment to UTGR Supplementary Promotional Points Program.

     (1) The Supplementary Promotional Points Program applicable to Twin River, which is

in addition to the Initial Promotional Points Program), shall be amended so that UTGR may

distribute to customers and prospective customers Promotional Points of up to but not more than

sixteen percent (16%) of Twin River net terminal income for the Prior Marketing Year. For

avoidance of doubt, as a result of the foregoing amendment, the approved amount of Promotional

Points that may be distributed by UTGR pursuant to the Initial and Supplementary Promotional

Points Programs, in the aggregate, may be up to but not more than twenty percent (20%) of the

amount of net terminal income of Twin River for the Prior Marketing Year, plus an additional

seven hundred fifty thousand dollars ($750,000), subject however, to subsections (a)(3) and (a)(4)

below. The terms and conditions of the Initial and Supplementary Promotional Points Programs

applicable to Twin River shall be established from time to time by the Division, and such terms

and conditions shall include, without limitation, a State fiscal year audit of the program, the cost

of which audit shall be borne by UTGR.

     (2) For the avoidance of doubt, the foregoing supersedes and replaces the provisions of

the UTGR Master Contract as established by Chapter 016, Section 4(a)(ii) of Part A of the public

laws of 2010, as amended pursuant to Chapter 151, Article 25, Section 8 of the Public Laws of

2011.

     (3) Notwithstanding the foregoing or anything in the general or public laws to the

contrary, the amendment to the UTGR Master Contract shall provide that nothing shall prohibit

UTGR, with prior approval from the Division, from spending additional funds on the Initial

and/or Supplementary Promotional Points Programs (i.e., distributing to customers and

prospective customers Promotional Points in amounts in excess of the amounts initially-approved

by the Division with respect to the Initial and/or Supplementary Promotional Points Program),

even if such additional amounts exceed four percent (4%) of Twin River net terminal income for

the Prior Marketing Year plus seven hundred fifty thousand dollars ($750,000) in regard to the

Initial Promotional Points Program for Twin River, or exceed sixteen percent (16%) of Twin

River net terminal income for the Prior Marketing Year in regard to the Supplementary

Promotional Points Program for Twin River, or exceed twenty percent (20%) of Twin River net

terminal income for the Prior Marketing Year plus seven hundred fifty thousand dollars

LC001711 - Page 11 of 15

($750,000) in regard to the Twin River Initial and Supplementary Promotional Points Programs in

the aggregate; provided however, that the expense of any such additional spending on

Promotional Points shall be borne by UTGR, subject to subsection (a)(4) below.

     (4) Notwithstanding any prior public or general law, rule, regulation or policy to the

contrary, UTGR shall remit to the Division the amount of any funds spent by UTGR in excess of

the amounts initially-approved by the Division with respect to the Initial and/or Supplementary

Promotional Points Programs – i.e., distributions to customers and prospective customers of

Promotional Points in excess of the amounts initially-approved by the Division for the Initial

and/or Supplementary Promotional Points Program, all pursuant to subsection (a)(3) above – and

the Division shall distribute such funds to the entities (including UTGR) entitled to a portion (or

percent) of net terminal income generated at Twin River pursuant to §42-61.2-7 of the Rhode

Island General Laws, paying to each such entity (including UTGR) that portion of the funds that

is equal to its portion (or percent) of net terminal income generated at Twin River as set forth in

§42-61.2-7 of the Rhode Island General Laws.

     (b) Except to the extent amended and/or clarified pursuant to subsection (a) above, the

terms, provisions and conditions of the UTGR Master Contract, including without limitation

those terms, provisions and conditions relating to the Initial Promotion Points Program, the

Supplementary Promotional Points Program and the Marketing Program, shall remain in full

force and effect. If there is a conflict between any provision of the UTGR Master Contract and

this act, the provisions of this act control.

     SECTION 6. Authorized Procurement of Sixth Amendment to the Newport Grand Master

Contract. Notwithstanding any general or public law, regulation or rule to the contrary, within

ninety (90) days of the enactment of this act, the Division is hereby expressly authorized,

empowered and directed to enter into with Newport Grand a Sixth Amendment to the Newport

Grand Master Contract as described in this section 6, to become effective April 1, 2017, except

the amendment made pursuant to subsection (b) below shall take effect pursuant to its terms:

     (a) Amendment to Newport Grand Supplementary Promotional Points Program.

     (1) The Supplementary Promotional Points Program applicable to Newport Grand, which

is in addition to the Initial Promotional Points Program, shall be amended so that Newport Grand

may distribute to customers and prospective customers Promotional Points up to but not more

than sixteen percent (16%) of Newport Grand net terminal income for the Prior Marketing Year.

For avoidance of doubt, as a result of the foregoing amendment, the approved amount of

Promotional Points that may be distributed by Newport Grand pursuant to the Initial and

Supplementary Promotional Points Programs, in the aggregate, may be up to but not more than

LC001711 - Page 12 of 15

twenty percent (20%) of the amount of net terminal income of Newport Grand for the Prior

Marketing Year, plus an additional seven hundred fifty thousand dollars ($750,000), subject

however, to subsections (a)(3) and (a)(4) below. The terms and conditions of the Initial and

Supplementary Promotional Points Programs applicable to Newport Grand shall be established

from time to time by the Division, and such terms and conditions shall include, without

limitation, a State fiscal year audit of the program, the cost of which audit shall be borne by

Newport Grand.

     (2) For the avoidance of doubt, the foregoing supersedes and replaces the provisions of

the Newport Grand Master Contract as established by Chapter 016, Section 4(a)(ii) of Part B of

the public laws of 2010, as amended pursuant to Chapter 151, Article 25, Section 8 of the Public

Laws of 2011.

     (3) Notwithstanding the foregoing or anything in the general or public laws to the

contrary, the amendment to the Newport Grand Master Contract shall provide that nothing shall

prohibit Newport Grand, with prior approval from the Division, from spending additional funds

on the Initial and/or Supplementary Promotional Points Programs (i.e., distributing to customers

and prospective customers Promotional Points in amounts in excess of the amounts initially-

approved by the Division with respect to the Initial and/or Supplementary Promotional Points

Program), even if such additional amounts exceed four percent (4%) of Newport Grand net

terminal income for the Prior Marketing Year plus seven hundred fifty thousand dollars

($750,000) in regard to the Initial Promotional Points Program for Newport Grand, or exceed

sixteen percent (16%) of Newport Grand net terminal income for the Prior Marketing Year in

regard to the Supplementary Promotional Points Program for Newport Grand, or exceed twenty

percent (20%) of Newport Grand net terminal income for the Prior Marketing Year plus seven

hundred fifty thousand dollars ($750,000) in regard to the Newport Grand Initial and

Supplementary Promotional Points Programs in the aggregate; provided however, that the

expense of any such additional spending on Promotional Points shall be borne by Newport Grand,

subject to subsection (a)(4) below.

     (4) Notwithstanding any prior public or general law, rule, regulation or policy to the

contrary, Newport Grand shall remit to the Division the amount of any funds spent by Newport

Grand in excess of the amounts initially-approved by the Division with respect to the Initial

and/or Supplementary Promotional Points Programs – i.e., distributions to customers and

prospective customers of Promotional Points in excess of the amounts initially-approved by the

Division for the Initial and/or Supplementary Promotional Points Program, all pursuant to

subsection (a)(3) above – and the Division shall distribute such funds to the entities (including

LC001711 - Page 13 of 15

Newport Grand) entitled to a portion (or percent) of net terminal income generated at Newport

Grand pursuant to §42-61.2-7 of the Rhode Island General Laws, paying to each such entity

(including Newport Grand) that portion of the funds that is equal to its portion (or percent) of net

terminal income generated at Newport Grand as set forth in §42-61.2-7 of the Rhode Island

General Laws.

     (b) Amendment to conform Newport Grand Master Contract to amendment to §42-61.2-7

of the Rhode Island General Laws. The Newport Grand Master Contract shall be amended to

conform that contract to the amendments made by section 2 of this act to §42-61.2-7 of the Rhode

Island General Laws. More specifically, the Newport Grand Master Contract shall be amended

such that the last sentence of Section 3.1 of the Fourth Amendment to the Newport Grand Master

Contract (dated July 14, 2015), shall read as follows, or with the following effect: "The increase

in rate of net terminal income payable to Newport Grand provided for in this Section 3.1 shall

sunset and expire upon the commencement of the operation of casino gaming at Twin River-

Tiverton's facility located in the town of Tiverton, and the rate in effect as of June 30, 2013 shall

be reinstated, and payable to the licensed entity hosting the casino gaming at such facility."

     (c) Except to the extent amended and/or clarified pursuant to subsections (a) and (b)

above, the terms, provisions and conditions of the Newport Grand Master Contract, including

without limitation those terms, provisions and conditions relating to the Initial Promotion Points

Program, the Supplementary Promotional Points Program and the Marketing Program, shall

remain in full force and effect. If there is a conflict between any provision of the Newport Grand

Master Contract and this act, the provisions of this act control.

     SECTION 7. This act shall take effect upon passage, except to the extent that individual

provisions of the act have specific effective dates.

========

LC001711

========

LC001711 - Page 14 of 15

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO THE STATE-OPERATED GAMING FACILITIES IN LINCOLN, NEWPORT,

AND, WHEN OPERATIONS COMMENCE, IN TIVERTON

***

     This act would allow the state to take certain actions in regard to state gaming as a result

of the recent referendum authorizing the establishment of a new casino gaming facility in the

town of Tiverton. The act would authorize the division of lotteries to enter into a sixth

amendment to the UTGR Master Contract. The act would also authorize amendments to the

Newport Grand Master Contract.

     This act would take effect upon passage, except to the extent that individual provisions of

the act have specific effective dates.

========

LC001711

========

LC001711 - Page 15 of 15