2020 -- H 7523 SUBSTITUTE A

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LC004693/SUB A/3

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2020

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A N   A C T

ENABLING THE STATE LOTTERY DIVISION OF THE DEPARTMENT OF REVENUE TO

CONTRACT WITH IGT GLOBAL SOLUTIONS CORPORATION AND TWIN RIVER

     

     Introduced By: Representatives Mattiello, Shekarchi, Kennedy, Abney, and Edwards

     Date Introduced: February 11, 2020

     Referred To: House Finance

     (Governor)

It is enacted by the General Assembly as follows:

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     SECTION 1. Purpose. The purpose of this act is, among other things: (a) To authorize the

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State Lottery Division of the Department of Revenue (the "Division") to agree to an extension of

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the Division's partnership with IGT Global Solutions Corporation, a Delaware corporation ("IGT"),

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including maintaining a regional headquarters in the City of Providence, Rhode Island; and (b) To

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authorize the Division to agree to an extension of the Division's partnership with the Rhode Island

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Affiliates of Twin River Worldwide Holdings, Inc., a Delaware corporation ("TRWH"), including

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an expansion of the Lincoln Gaming Facility. This act shall be liberally construed to effectuate its

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purposes.

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     SECTION 2. Definitions.

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     (a) In this act, capitalized terms not otherwise defined shall have the meanings given them

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in Section 42-61.2-1 of the General Laws as of the effective date of this act after giving effect to

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the amendments thereto pursuant to Section 5 of this act.

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     (b) In this act:

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     (1) "Affiliate" means a Person that directly, or indirectly through one or more

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intermediaries, controls, is controlled by or is under common control with a Person;

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     (2) "Control" means the possession, directly or indirectly, of the power to direct or cause

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the direction of the management and policies of a Person, whether through the ownership of voting

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securities, by contract or otherwise;

 

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     (3) "Eligible Third Party" means any Person which (acting jointly with IGT or TRWH or

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at the direction of IGT or TRWH (as applicable)) owns, leases or finances any of the IGT

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Investment Obligation Assets (as defined in Section 3(a)(ix)(A) of this act) or the assets associated

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with the Twin River Investment Obligation (as defined in Section 10 of this act);

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     (4) "FTE" means a full time equivalent employee, which, for the purposes of this

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Agreement, shall mean 2,080 hours of employment of one or more individuals in a year by IGT or

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an Affiliate employed in the State, which hours of employment shall include vacation time, sick

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time, disability time, personal time or other time for which an employer in the State must pay the

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employee. For purposes of this Agreement, "FTE" shall include, without limitation, employees of

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outsourcing and consulting service providers and temporary employees retained through an

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employment agency in the State. For employees who are not paid on an hourly basis, each full-time

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salaried employee employed for a full year shall be deemed to work 2,080 hours per year, and each

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salaried part-time employee shall be deemed to work a proportionate share of the 2,080 hours based

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on the hourly commitment set forth in such employee's job description. The hours attributed to

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salaried employees shall be prorated for any employees who are employed for less than a full year.

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     (5) "IGT Master Contract" means the Master Contract dated as of May 12, 2003 by and

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between the Division and IGT, as amended (authorized pursuant to Chapter 33 of the 2003 Public

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Laws);

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     (6) "Joint Venture" means a Delaware limited liability company to be owned by IGT or

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Affiliates of IGT and TRWH or Affiliates of TRWH and controlled by IGT or an Affiliate of IGT,

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which Joint Venture shall be regulated by the Division as a Technology Provider; and

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     (7) "Person" means a natural person, corporation, limited liability company, partnership

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(general or limited), joint venture, estate, trust or unincorporated association, any federal, state,

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county, or municipal government or any bureau, department or agency thereof, any fiduciary acting

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in such capacity, on behalf of any of the foregoing, or any other legal or business entity or

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organization.

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     SECTION 3. Authorization and empowerment of State Lottery Division with respect to

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IGT. Notwithstanding any provisions of the General Laws of the state or regulations adopted

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thereunder to the contrary, including, without limitation, the provisions of Chapter 2 of Title 37,

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Chapter 61 of Title 42, and Chapter 64 of Title 42, the Division is hereby authorized and

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empowered:

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     (a) To enter into an amendment (the "IGT Master Contract Amendment") to the IGT Master

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Contract, which shall extend the term of the IGT Master Contract under the terms and conditions

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set forth therein, as amended pursuant to Section 3 and Section 4 of this act and as may be otherwise

 

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amended in accordance with its terms, through June 30, 2043 (the "Extended Expiration Date"),

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and shall, among other matters:

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     (i) Extend the term of the On-Line Gaming Agreement dated as of January 29, 1997 by and

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between IGT and the Division, as amended (including, without limitation, by Section 11 of the IGT

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Master Contract) (the "On-Line Lottery Agreement"), under the terms and conditions set forth

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therein, as amended pursuant to Section 3 and Section 4 of this act and as may be otherwise

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amended in accordance with its terms, through the Extended Expiration Date;

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     (ii) Extend the term of the Video Lottery Central Computer System Agreement dated as of

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December 20, 2001 by and between IGT and the Division, as amended (including, without

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limitation, by Section 12 of the IGT Master Contract) (the "Video Lottery Agreement"), under the

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terms and conditions set forth therein, as amended pursuant to Section 4 of this act and as may be

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otherwise amended in accordance with its terms, through the Extended Expiration Date;

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     (iii) Extend the term of the Video Lottery Terminal Technology Provider License

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Agreement dated as of September 28, 2000 by and between IGT and the Division, as amended

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(including, without limitation, by Section 13 of the IGT Master Contract) (the "VLT Agreement"),

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under the terms and conditions set forth therein, as amended pursuant to Section 4 of this act and

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as may be otherwise amended in accordance with its terms, through the Extended Expiration Date;

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     (iv) Extend the term of the Instant Ticket Vending Machine Agreement dated October 21,

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1999 between IGT and the Division (the "Instant Ticket Vending Machine Agreement"), as

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amended (including, without limitation, pursuant to Section 8.2 of the IGT Master Contract), under

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the terms and conditions set forth therein, as may be otherwise amended in accordance with its

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terms, through the Extended Expiration Date;

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     (v) Extend the term of the Instant Ticket Agreement dated as of June 30, 2016 by and

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between the Division and IGT (the "Instant Ticket Agreement"), as amended, under the terms and

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conditions set forth therein, as may be otherwise amended in accordance with its terms, through

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the Extended Expiration Date;

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     (vi) Extend the term of the Website Services Agreement dated as of January 9, 2019 by

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and between the Division and IGT (the "Website Services Agreement") under the terms and

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conditions set forth therein, as may be otherwise amended in accordance with its terms, through

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the Extended Expiration Date;

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     (vii) Provide for the purchase by IGT from the Division for the price of twenty-five million

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dollars ($25,000,000) (the "Second Intangible Asset Purchase Price"), twelve million five hundred

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thousand dollars ($12,500,000) of which shall be paid on or before June 30, 2022 and twelve

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million five hundred thousand dollars ($12,500,000) of which shall be paid on or before June 30,

 

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2023, of the right of IGT to be the exclusive provider to the Division of products and services

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(except with respect to Online sports wagering as otherwise provided by the First Amendment to

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the Sports Betting Agreement effective on or about July 5, 2019 between the Division and IGT, a

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Nevada corporation, as amended from time to time) pertaining to:

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     (A) Online lottery systems, online lottery terminals and related equipment;

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     (B) Central communication systems;

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     (C) Video Lottery Terminals for the period commencing on January 1, 2022 (the "JV

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Effective Date") and expiring on the Extended Expiration Date (with such exclusive rights to be

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exercised solely through the Joint Venture pursuant to the assignment effected by the Assignment

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and Assumption Agreement (as defined in Section 3(b)(ii) of this act) for the period commencing

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on the JV Effective Date and expiring on the Extended Expiration Date);

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     (D) Instant ticket vending machines;

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     (E) Instant tickets;

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     (F) The processing of on line, instant ticket and video lottery transactions;

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     (G) "iLottery" games (traditional online lottery and instant ticket lottery games made

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available to players through the use of the internet through computers, mobile applications on

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mobile devices or other interactive devices approved by the Division);

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     Notwithstanding subparagraphs (A) through (G) above, the payment of the Second

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Intangible Asset Purchase Price shall not entitle IGT to the right to be the exclusive provider of

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games (other than traditional online lottery and instant ticket lottery games) through the use of the

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internet through computers, mobile applications on mobile devices or other interactive devices

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approved by the Division;

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     (viii) Provide that:

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     (A) The rates pursuant to which the Division is obligated to compensate IGT pursuant to

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the On-Line Lottery Agreement shall be as follows:

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     Annual Sales Rate

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     Sales to $275 million 5.00%

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     Sales from above $275 million to $400 million 4.00%

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     Sales above $400 million 5.00%

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     (B) The rates pursuant to which the Division is obligated to compensate IGT pursuant to

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the Video Lottery Agreement, the Instant Ticket Vending Machine Agreement, the Instant Ticket

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Agreement and the Website Services Agreement shall remain unchanged;

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     (C) The rates pursuant to which the Division is obligated to compensate IGT prior to the

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JV Effective Date and the Joint Venture from and after the JV Effective Date pursuant to the VLT

 

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Agreement shall remain unchanged;

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     (ix) Obligate IGT to, among other matters:

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     (A) Invest or cause to be invested by an Affiliate or an Eligible Third Party in the aggregate

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at least one hundred fifty million dollars ($150,000,000) in the state (the "Second IGT Investment

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Obligation") in connection with acquiring interests in real property, leasehold improvements of real

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property and assets acquired in connection with the performance of obligations under the IGT

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Master Contract, as amended by the IGT Master Contract Amendment (the "IGT Amended Master

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Contract"), including, without limitation: (1) The second intangible asset purchase price; (2) Video

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Lottery Terminals purchased by IGT and Affiliates of IGT during the period commencing on July

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1, 2019 and expiring on December 31, 2021; (3) Video Lottery Terminals purchased by the Joint

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Venture during the period commencing on the JV Effective Date and expiring on the Extended

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Expiration Date (including, without limitation, Video Lottery Terminals sold by IGT and other

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Affiliates of IGT); and (4) Goods acquired in connection with the business operations of IGT or

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any Affiliate of IGT in the state (the "IGT Investment Obligation Assets"); provided, however, in

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no event shall IGT receive credit toward performance of the Second IGT Investment Obligation

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more than once in connection with any acquisition;

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     (B) Employ, cause to be employed by an Affiliate or a Person providing outsourcing,

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technology consulting or temporary employment services to IGT or an Affiliate, or cause to be self-

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employed in the state during each calendar year commencing with 2021 at least one thousand one

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hundred (1,100) full-time equivalent employees (the "Minimum Number of FTEs") calculated in

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accordance with the methodology as defined in Section 2(b)(4) of this act established for the

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purposes of the Development Agreement between IGT and the Rhode Island Commerce

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Corporation in effect as of June 1, 2020, at compensation rates not less than one hundred fifty

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percent (150%) of the minimum wage in effect from time to time pursuant to Section 28-12-3 of

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the General Laws(the "Employment Obligation");

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     (C) Pay, or cause to be paid by Affiliates or Persons providing outsourcing, technology

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consulting or temporary employment services to IGT or an Affiliate, to employees and independent

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contractors employed or caused to be self-employed in the state during each calendar year

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commencing with 2021 aggregate compensation (which shall include pre-tax deductions made on

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behalf of employees) (the "Annual Actual Compensation") not less than the product of: (1) One

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thousand one hundred (1,100); (2) Two thousand eighty (2,080); and (3) Two hundred fifty percent

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(250%) of the minimum wage in effect from time to time pursuant to Section 28-12-3 of the General

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Laws (the "Annual Compensation Obligation");

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     (D) Provide to the Division an annual certification on or before May 1 of each year

 

LC004693/SUB A/3 - Page 5 of 29

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certifying that IGT is in compliance with its Employment Obligation for the prior calendar year.

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In addition, IGT shall provide to the Division an annual certification on or before May 1 of each

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year certifying that IGT is in compliance with its Annual Compensation Obligation for the prior

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calendar year; and

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     (E) Not fewer than ninety (90) days prior, inform the Division each time IGT plans to locate

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in another state, or relocate from one state to another state thirty (30) or more full-time existing or

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new employees that IGT or an Affiliate is not contractually obligated to locate in or relocate to

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another state to give the Division the opportunity to make a proposal to IGT that IGT locate in or

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relocate to the state such employees (the "Employee Location Obligation");

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     (x) Grant the Division the right to terminate the IGT Amended Master Contract if IGT fails

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to perform: the Second IGT Investment Obligation; the Employment Obligation; the Annual

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Compensation Obligation; or the Employee Location Obligation in addition to any rights the

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Division has to terminate the On-Line Lottery Agreement, the Video Lottery Agreement, the VLT

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Agreement, the Instant Ticket Vending Machine Agreement, the Instant Ticket Agreement and the

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Website Services Agreement;

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     (xi) Notwithstanding the remedies provided in section 3(a)(x), the Division shall have the

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right to:

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     (A) Grant the Division the right to assess liquidated damages against IGT if the average

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number of full-time equivalent employees (the "LD FTE Average") for each period of two

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consecutive calendar years commencing with the two-year period expiring on December 31, 2022,

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and tested annually thereafter, is less than the Minimum Number of FTEs. Said liquidated damages

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shall be equal to the product of: (1) the difference between the Minimum Number of FTEs and the

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LD FTE Average and (2) six thousand four hundred dollars ($6,400); and

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     (B) Grant the Division the right to assess liquidated damages against IGT if, for each period

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of two consecutive calendar years commencing with the two-year period expiring on December 31,

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2022, and tested annually thereafter, the average of the Annual Actual Compensation for such

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period (the "LD Compensation Average") is less than the average of the Annual Compensation

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Obligation for such period (the "LD Obligation Average"). Said liquidated damages shall be in an

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amount equal to the product of: (1) twenty percent (20%) and (2) the difference between the LD

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Obligation Average for such period and the LD Compensation Average for such period;

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     (xii) Provide that the provisions regarding the Video Lottery Terminal efficiency process

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would be of no further force and effect for the period commencing on the JV Effective Date and

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expiring on the Extended Expiration Date, subject to the provisions of Section 4 of this act; and

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     (xiii) Contain such other terms and conditions as the Division and IGT may agree; and

 

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     (b) To consent to:

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     (i) The irrevocable assignment by IGT to the Joint Venture of:

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     (A) The right to be the exclusive Technology Provider for the period commencing on the

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JV Effective Date and expiring on the Extended Expiration Date; and

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     (B) The VLT Agreement, as modified solely by the IGT Master Contract Amendment (the

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"Amended VLT Agreement"); and

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     (ii) The assumption by the Joint Venture of the obligations of IGT under the Amended

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VLT Agreement pursuant to an assignment and assumption agreement between IGT and the Joint

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Venture (the "Assignment and Assumption Agreement"), the terms of which shall be subject to the

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review and approval of the Division.

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     (c) Nothing in this act shall be deemed to affect the authority of the Division to regulate

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the Joint Venture as a Technology Provider.

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     SECTION 4. Additional provisions regarding the IGT Master Contract Amendment. The

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IGT Master Contract Amendment shall also include, but not be limited to, provisions that require

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IGT or the Joint Venture (as applicable) to:

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     (a) With respect to Video Lottery Terminals:

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     (1) Regularly update or replace hardware and software; (2) Annually replace a minimum

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of six percent (6%) of the Video Lottery Terminals; (3) Provide a minimum of five percent (5%)

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of the Video Lottery Terminals with premium or royalty games with such Video Lottery Terminals

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performing at less than one hundred fifty percent (150%) of floor average for any calendar year

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subject to review by the Division for replacement or modification; (4) For the period commencing

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on the JV Effective Date and expiring on the Extended Expiration Date, (a) cause the Joint Venture

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to remove five percent (5%) of the Video Lottery Terminals provided as of December 31 of the

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preceding year supplied by each supplier to the Joint Venture whose ratio of: (i) The ratio of: (A)

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The aggregate Net Terminal Income generated by the Video Lottery Terminals supplied by such

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supplier and provided by the Joint Venture during the first thirteen (13) weeks of each calendar

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year to (B) The aggregate Net Terminal Income generated by the Video Lottery Terminals provided

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by the Joint Venture during such period to; (ii) The ratio of: (A) The number of Video Lottery

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Terminals supplied by such supplier and provided by the Joint Venture to (B) The total number of

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Video Lottery Terminals provided by the Joint Venture is less than ninety seven percent (97%);

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provided, however, that (x) no more than 40% of the Video Lottery Terminals installed at the

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Lincoln Gaming Facility and no more than 40% of the Video Lottery Terminals installed at the

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Tiverton Gaming Facility on the JV Effective Date shall be Video Lottery Terminals manufactured

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by IGT or an Affiliate of IGT and (y) Video Lottery Terminals manufactured by IGT or an Affiliate

 

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of IGT shall not be subject to removal for calendar years 2022, 2023 and 2024 and (b) nothing in

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this act shall limit the authority of the Division to approve the Video Lottery Terminals and Video

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Lottery Games provided by the Joint Venture and which Video Lottery Terminals provided by the

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Joint Venture are installed at which locations in the Lincoln Gaming Facility and the Tiverton

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Gaming Facility; and (5) For each Marketing Year occurring during the period commencing on

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July 1, 2020 and expiring on the Extended Expiration Date, waive its claims against the Division

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arising from or in connection with the Consolidated Promotional Points Program, provided that the

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aggregate amount of Promotional Points issued in such Marketing Year does not exceed the sum

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of: (a) twenty percent (20%) of the aggregate Net Terminal Income for the Lincoln Gaming Facility

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and the Tiverton Gaming Facility for the Prior Marketing Year and (b) one million five hundred

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thousand dollars ($1,500,000); and

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     (b) With respect to IGT's online lottery systems and central communication systems,

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update and replace hardware and software on schedules agreed to by the Division and IGT in the

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IGT Master Contract Amendment, as amended from time to time.

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     SECTION 5.

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     (a) Section 42-61.2-1 of the General Laws in Chapter 42-61.2 entitled “Video-Lottery

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Games, Table Games and Sports Wagering” is hereby amended to read as follows:

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     42-61.2-1. Definitions.

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     For the purpose of this chapter, the following words shall mean:

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     (1) "2017 Budget Act" means 2017 – H 5175 Substitute A, as amended, entitled "An Act

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Relating to Making Appropriations for the Support of the State for the Fiscal Year ending June 30,

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2018," which Act was signed into law by the Governor of Rhode Island on August 3, 2017.

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     (1)(2) "Casino gaming" means any and all table and casino-style games played with cards,

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dice, or equipment, for money, credit, or any representative of value; including, but not limited to,

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roulette, blackjack, big six, craps, poker, baccarat, paigow, any banking or percentage game, or any

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other game of or device included within the definition of Class III gaming as that term is defined

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in Section 2703(8) of Title 25 of the United States Code and that is approved by the state through

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the division of state lottery.

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     (2)(3) "Central communication system" means a system approved by the lottery division

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Division, linking all video-lottery machines Video Lottery Terminals at a licensee licensed video

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lottery retailer location to provide auditing program information and any other information

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determined by the lottery Division. In addition, the central communications system must provide

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all computer hardware and related software necessary for the establishment and implementation of

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a comprehensive system as required by the division Division. The central communications licensee

 

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may provide a maximum of fifty percent (50%) of the video-lottery terminals.

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     (3)(4) Collegiate sports or athletic event" shall not include a collegiate sports contest or

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collegiate athletic event that takes place in Rhode Island or a sports contest or athletic event in

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which any Rhode Island college team participates regardless of where the event takes place.

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     (5) "Consolidated promotional points program" means, collectively, the "Initial

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Promotional Points Program" and the "Supplementary Promotional Points Program" applicable to

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the Lincoln gaming facility and the "Initial Promotional Points Program" and the "Supplementary

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Promotional Points Program" applicable to the Tiverton gaming facility, with each of the terms

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"Initial Promotional Points Program" and "Supplementary Promotional Points Program" having the

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meanings given such terms in the 2017 Budget Act.

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     (4)(6) "Credit facilitator" means any employee of a licensed video-lottery video lottery

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retailer approved in writing by the division Division whose responsibility is to, among other things,

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review applications for credit by players, verify information on credit applications, grant, deny, and

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suspend credit, establish credit limits, increase and decrease credit limits, and maintain credit files,

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all in accordance with this chapter and rules and regulations approved by the division Division.

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     (5)(7) "DBR" means the department of business regulation, division of gaming and

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athletics licensing, and/or any successor in interest thereto.

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     (6)(8) "Director" means the director of the division Division.

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     (7)(9) "Division," "division of lottery," "division of lotteries," or "lottery division" means

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the division of lotteries within the state lottery division of the department of revenue and/or any

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successor in interest thereto.

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     (8)(10) "Hosting facility" refers to Twin River the Lincoln gaming facility and the Tiverton

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gaming facility.

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     (11) “IGT” means IGT Global Solutions Corporation, a Delaware corporation.

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     (9)(12) "Licensed video-lottery video lottery retailer" means a pari-mutuel licensee

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specifically licensed by the director Director subject to the approval of the division Division to

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become a licensed video-lottery video lottery retailer.

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     (13) "Lincoln gaming facility" means the gaming and entertainment facility located at 100

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Twin River Road in the town of Lincoln, Rhode Island (sometimes referred to as "Twin River" or

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the "Twin River gaming facility").

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

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     (10)(15) "Net table-game revenue" means win from table games minus counterfeit

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currency.

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     (11)(16) "Net terminal income" means currency placed into a video-lottery terminal Video-

 

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Lottery Terminal less credits redeemed for cash by players.

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     (12)(17) "Newport Grand" means Newport Grand, LLC, a Rhode Island limited-liability

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company, successor to Newport Grand Jai Alai, LLC, and each permitted successor to and assignee

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of Newport Grand, LLC under the Newport Grand Master Contract, including, but not limited to

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without limitation, Premier Entertainment II, LLC (as defined in subsection (25) of this section)

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and/or Twin River-Tiverton, LLC, (as defined in subsection (40) of this section) provided it is a

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pari-mutuel licensee (as defined in § Section 42-61.2-1 et seq.); provided, further, however, where

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the context indicates that the term is referring to the physical facility, then it shall mean the gaming

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and entertainment facility located at 150 Admiral Kalbfus Road, Newport, Rhode Island.

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     (13)(18) "Newport Grand Marketing Year" means each fiscal year of the state or a portion

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thereof between November 23, 2010, and the termination date of the Newport Grand Master

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Contract.

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     (14)(19) "Newport Grand Master Contract" means that certain master video-lottery video

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lottery terminal contract made as of November 23, 2005, by and between the division of lotteries

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of the Rhode Island department of administration and Newport Grand, as amended and extended

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from time to time as authorized therein and/or as such Newport Grand Master Contract may be

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assigned as permitted therein.

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     (15)(20) "Online gaming account" means an account established at a hosting facility and

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opened by a patron in person on the premises of a hosting facility that a patron shall use for the

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deposit and withdrawal of funds used for online sports wagering.

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     (16)(21) "Online sports wagering" means engaging in the act of sports wagering by the

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placing of wagers on sporting events or a combination of sporting events, or on the individual

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performance statistics of athletes in a sporting event or a combination of sporting events, over the

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internet through computers, mobile applications on mobile devices or other interactive devices

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approved by the division Division, which wagers are accepted by a server-based gaming system

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located at the premises of a hosting facility authorized to accept sports wagers and administer

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payoffs of winning sports wagers; all such wagers shall be deemed to be placed and accepted at the

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premises of a hosting facility.

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     (17)(22) "Online sports-wagering revenue" means:

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     (i) The total of cash or cash equivalents received from online sports wagering minus the

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total of:

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     (I) Cash or cash equivalents paid to players as a result of online sports wagering;

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     (II) Marketing expenses related to online sports wagering as agreed to by the division

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Division, the sports-wagering vendor, and the host facilities, as approved by the division of the

 

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lottery Division; and

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     (III) Any federal excise taxes (if applicable).

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     (ii) The term does not include any of the following:

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     (I) Counterfeit cash.

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     (II) Coins or currency of other countries received as a result of online sports wagering,

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except to the extent that the coins or currency are readily convertible to cash.

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     (III) Cash taken in a fraudulent act perpetrated against a hosting facility or sports-wagering

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vendor for which the hosting facility or sports-wagering vendor is not reimbursed.

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     (IV) Free play provided by the hosting facility or sports-wagering vendor as authorized by

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the division of the lottery Division to a player and subsequently "won back" by the hosting facility

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or sports-wagering vendor, for which the hosting facility or sports-wagering vendor can

12

demonstrate that it or its affiliate has not been reimbursed in cash.

13

     (18)(23) "Pari-mutuel licensee" means:

14

     (i) An entity licensed pursuant to § Section 41-3.1-3; and/or

15

     (ii) An entity licensed pursuant to § Section 41-7-3.

16

     (19)(24) "Payoff," when used in connection with sports wagering, means cash or cash

17

equivalents paid to a player as a result of the player's winning a sports wager. A "payoff" is a type

18

of "prize," as the term "prize" is used in chapters 61, 61.2, and 61.3 of this title.

19

     (20)(25) "Premier" means Premier Entertainment II, LLC and/or its successor in interest

20

by reason of the acquisition of the stock, membership interests, or substantially all of the assets of

21

such entity.

22

     (26) "Prior marketing year," means, with respect to a marketing year, the most recent

23

previous marketing year during which the Division operated a majority of the authorized video

24

lottery games at each of the Lincoln gaming facility and the Tiverton gaming facility for at least

25

360 days (or 361 days in the case there are 366 days in such marketing year). For the avoidance of

26

doubt, because the Division will not have operated a majority of the authorized video lottery games

27

at the Lincoln gaming facility and at the Tiverton gaming facility for at least 361 days during the

28

marketing year expiring on June 30, 2020, the prior marketing year with respect to the marketing

29

year expiring on June 30, 2021 shall be the marketing year expiring on June 30, 2019.

30

     (27) "Promotional points" has the meaning given such term in the 2017 Budget Act.

31

     (21)(28) "Rake" means a set fee or percentage of cash and chips representing cash wagered

32

in the playing of a nonbanking table game assessed by a table games retailer for providing the

33

services of a dealer, gaming table, or location, to allow the play of any nonbanking table game.

34

     (22)(29) "Server-based gaming system" means all hardware, software, and

 

LC004693/SUB A/3 - Page 11 of 29

1

communications devices that comprise a system utilized for the purpose of offering an electronic

2

platform used in connection with the process of placing and accepting sports wagers.

3

     (23)(30) "Sporting event" means any professional sport or athletic event, any Olympic or

4

international sports competition event, and any collegiate sport or athletic event, or any portion

5

thereof, including, but not limited to, the individual performance statistics of athletes in a sports

6

event or combination of sports events, except "sports event" shall not include a prohibited sports

7

event.

8

     (24)(31) "Sports wagering" means the business of accepting wagers on sporting events or

9

a combination of sporting events, or on the individual performance statistics of athletes in a sporting

10

event or combination of sporting events, by any system or method of wagering. The term includes,

11

but is not limited to, exchange wagering, parlays, over-under, moneyline, pools, and straight bets,

12

and the term includes the placement of such bets and wagers. However, the term does not include,

13

without limitation, the following:

14

     (i) Lotteries, including video-lottery video lottery games and other types of casino gaming

15

operated by the state, through the division Division, on the date this act is enacted [ as of June 22,

16

2018].

17

     (ii) Pari-mutuel betting on the outcome of thoroughbred or harness horse racing, or

18

greyhound dog racing, including but not limited to, pari-mutuel wagering on a race that is

19

"simulcast" (as defined in § Section 41-11-1), as regulated elsewhere pursuant to the general laws

20

General Laws, including in chapters 3, 3.1, 4, and 11 of title 41.

21

     (iii) Off-track betting on racing events, as regulated elsewhere pursuant to the general laws

22

General Laws, including in chapter 10 of title 41.

23

     (iv) Wagering on the respective scores or points of the game of jai alai or pelota and the

24

sale of pari-mutuel pools related to such games, as regulated elsewhere pursuant to the general laws

25

General Laws, including in chapter 7 of title 41.

26

     (v) Lotteries, charitable gaming, games of chance, bingo games, raffles, and pull-tab lottery

27

tickets, to the extent permitted and regulated pursuant to chapter 19 of title 11.

28

     (25)(32) "Sports-wagering device" means any mechanical, electrical, or computerized

29

contrivance, terminal, machine, or other device, apparatus, equipment, or supplies approved by the

30

division Division and used to conduct sports wagering.

31

     (26)(33) "Sports-wagering revenue" means:

32

     (i) The total of cash or cash equivalents received from sports wagering minus the total of:

33

     (I) Cash or cash equivalents paid to players as a result of sports wagering;

34

     (II) The annual flat fee to the host communities as defined by § Section 42-61.2-5(c);

 

LC004693/SUB A/3 - Page 12 of 29

1

     (III) Marketing expenses related to sports wagering as agreed to by the division Division,

2

the sports-wagering vendor, and the host facilities, as approved by the division of the lottery

3

Division; and

4

     (IV) Any federal excise taxes (if applicable).

5

     (ii) The term does not include any of the following:

6

     (I) Counterfeit cash.

7

     (II) Coins or currency of other countries received as a result of sports wagering, except to

8

the extent that the coins or currency are readily convertible to cash.

9

     (III) Cash taken in a fraudulent act perpetrated against a hosting facility or sports-wagering

10

vendor for which the hosting facility or sports-wagering vendor is not reimbursed.

11

     (IV) Free play provided by the hosting facility or sports-wagering vendor as authorized by

12

the division of lottery Division to a patron and subsequently "won back" by the hosting facility or

13

sports-wagering vendor, for which the hosting facility or sports-wagering vendor can demonstrate

14

that it or its affiliate has not been reimbursed in cash.

15

     (27)(34) "Sports-wagering vendor" means any entity authorized by the division of lottery

16

Division to operate sports betting on the division's Division's behalf in accordance with this chapter.

17

     (28)(35) "Table game" or "Table gaming" means that type of casino gaming in which table

18

games are played for cash or chips representing cash, or any other representation of value that has

19

been approved by the division of lotteries Division, using cards, dice, or equipment and conducted

20

by one or more live persons.

21

     (29)(36) "Table-game retailer" means a retailer authorized to conduct table gaming

22

pursuant to § Section 42-61.2-2.1 or § Section 42-61.2-2.3.

23

     (30)(37) "Technology provider" means any individual, partnership, corporation, or

24

association that designs, manufactures, installs, maintains, distributes, or supplies video-lottery

25

machines Video-Lottery Terminals or associated equipment for the sale or use in this state.

26

     (31)(38) "Tiverton gaming facility" (sometimes referred to as "Twin River-Tiverton")

27

means the gaming and entertainment facility located in the town of Tiverton at the intersection of

28

William S. Canning Boulevard and Stafford Road in the town of Tiverton, Rhode Island

29

(sometimes referred to as "Twin River-Tiverton").

30

     (32)(39) "Twin River" (sometimes referred to as "UTGR") means UTGR, Inc., a Delaware

31

corporation, and each permitted successor to and assignee of UTGR, Inc.; provided further,

32

however, where the context indicates that the term is referring to a physical facility, then "Twin

33

River" or "Twin River gaming facility" shall mean the gaming and entertainment facility located at

34

100 Twin River Road in Lincoln, Rhode Island Lincoln gaming facility.

 

LC004693/SUB A/3 - Page 13 of 29

1

     (33)(40) "Twin River-Tiverton" means Twin River-Tiverton, LLC and/or its successor in

2

interest by reason of the acquisition of the stock, membership interests, or substantially all of the

3

assets of such entity; provided, however, where the context indicates that the term is referring to a

4

physical facility, then "Twin River-Tiverton" shall mean the Tiverton gaming facility.

5

     (41) "Twin River-Tiverton Marketing Year" has the same meaning as Marketing Year (as

6

defined in subsection (14) of this section).

7

     (42) "Twin River-Tiverton Master Contract" has the same meaning as Newport Grand

8

Master Contract (as defined in subsection (19) of this section).

9

     (43) "UTGR Master Contract" means that certain master video lottery terminal contract

10

made as of July 1, 2005, by and between the division of lotteries of the Rhode Island department

11

of administration (now the division of lotteries of the Rhode Island department of revenue) and

12

Twin River, as amended and extended from time to time as authorized therein and/or as such UTGR

13

Master Contract may be assigned as permitted therein.

14

     (44) "Video Lottery Agreement" means that certain Video Lottery Central Computer

15

System Agreement dated as of December 20, 2001 by and between IGT and the Division, as

16

amended, extended, assigned and assumed from time to time.

17

     (34)(45) "Video-lottery games" means lottery games played on video-lottery terminals

18

Video Lottery Terminals controlled by the lottery division Division.

19

     (35)(46) "Video-lottery terminal" "Video lottery terminal" means any electronic

20

computerized video game machine that, upon the insertion of cash or any other representation of

21

value that has been approved by the division of lotteries Division, is available to play a video game

22

authorized by the lottery division Division, and that uses a video display and microprocessors in

23

which, by chance, the player may receive free games or credits that can be redeemed for cash. The

24

term does not include a machine that directly dispenses coins, cash, or tokens.

25

     (47) "VLT Agreement" means that certain Video Lottery Terminal Technology Provider

26

License Agreement dated as of September 28, 2000 by and between IGT and the Division, as

27

amended, extended, assigned and assumed from time to time.

28

     (b) Section 42-61.2-7 of the General Laws in Chapter 42-61.2 entitled "Video-Lottery

29

Games, Table Games and Sports Wagering" is hereby amended to read as follows:

30

     42-61.2-7. Division of revenue.

31

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

32

income derived from video-lottery video lottery games is as follows:

33

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

34

administrative purposes: Net, terminal income not otherwise disbursed in accordance with

 

LC004693/SUB A/3 - Page 14 of 29

1

subdivisions (a)(2) -- (a)(6) inclusive, or otherwise disbursed in accordance with subsections (g)(2)

2

and (h)(2);

3

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

4

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

5

the distressed communities (as defined in § Section 45-13-12) provided that no eligible community

6

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

7

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

8

are supplemental to all other distributions made under any portion of general laws § General Laws

9

Section 45-13-12. For the fiscal year ending June 30, 2008, distributions by community shall be

10

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

11

general appropriations. For the fiscal year ending June 30, 2009, the total state distribution shall be

12

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

13

general appropriations. For the fiscal year ending June 30, 2010, the total state distribution shall be

14

the same total amount distributed in the fiscal year ending June 30, 2009, and shall be made from

15

general appropriations, provided, however, that seven hundred eighty-four thousand four hundred

16

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

17

qualifying distressed community. For each of the fiscal years ending June 30, 2011, June 30, 2012,

18

and June 30, 2013, seven hundred eighty-four thousand four hundred fifty-eight dollars ($784,458)

19

of the total appropriation shall be distributed equally to each qualifying distressed community.

20

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

21

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

22

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

23

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

24

maximum credit of five hundred dollars ($500) is obtained. In no event shall the exemption in any

25

fiscal year be less than the prior fiscal year.

26

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

27

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

28

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

29

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

30

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

31

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

32

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

33

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

34

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

 

LC004693/SUB A/3 - Page 15 of 29

1

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

2

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

3

funding shall be determined by appropriation.

4

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

5

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

6

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

7

dollars ($384,996);

8

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

9

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

10

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

11

hundred ninety-six dollars ($384,996).

12

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

13

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

14

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

15

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

16

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

17

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

18

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

19

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

20

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

21

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

22

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

23

any Newport Grand Marketing Year as a result of such increase in rate shall be referred to as

24

"Additional Newport Grand Marketing NTI."

25

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

26

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

27

Newport Grand Marketing Year over one million four hundred thousand dollars ($1,400,000) shall

28

be referred to as the "Newport Grand Marketing Incremental Spend." Beginning with the Newport

29

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

30

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

31

Contract shall pay to the Division the amount, if any, by which the Additional Newport Grand

32

Marketing NTI for such Newport Grand Marketing Year exceeds the Newport Grand Marketing

33

Incremental Spend for such Newport Grand Marketing Year; provided however, that such video-

34

lottery video lottery retailer's liability to the Division hereunder with respect to any Newport Grand

 

LC004693/SUB A/3 - Page 16 of 29

1

Marketing Year shall never exceed the Additional Newport Grand Marketing NTI paid to such

2

video-lottery video lottery retailer with respect to such Newport Grand Marketing Year.

3

     The increase in subsection 2(a)(iv) shall sunset and expire upon the commencement of the

4

operation of casino gaming at Twin River-Tiverton's facility located in the town of Tiverton, and

5

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

6

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

7

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

8

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

9

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

10

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

11

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

12

under said master contract minus seven hundred sixty-seven thousand six hundred eighty-seven

13

dollars ($767,687).

14

     (3) Except for the period commencing on January 1, 2022 and expiring on June 30, 2043,

15

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

16

forth and referenced in P.L. 2003, ch. 32, seven percent (7%) of the net, terminal income of the

17

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

18

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

19

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

20

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

21

if all of the following criteria are met:

22

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

23

or licensed proprietary content at its licensed, video-lottery video lottery facility;

24

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

25

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

26

of the licensed, video-lottery video lottery retailer;

27

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

28

licensed, proprietary-content video-lottery video lottery terminals does not exceed ten percent

29

(10%) of the total number of video-lottery video lottery terminals authorized at the respective

30

licensed, video-lottery video lottery retailer; and

31

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

32

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

33

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

34

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

 

LC004693/SUB A/3 - Page 17 of 29

1

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

2

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

3

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

4

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

5

thirty-seven dollars ($628,737) which shall be distributed pursuant to Section 42-61.2-7(b)(3)(iii).

6

With respect to the period commencing on January 1, 2022 and expiring on June 30, 2043,

7

     (i) To the exclusive technology provider, all sums due and payable under the VLT

8

Agreement;

9

     (ii) Notwithstanding paragraph (i), there shall be subtracted from the payments to the

10

exclusive technology provider the sum of six hundred twenty-eight thousand seven hundred thirty-

11

seven dollars ($628,737) which shall be distributed pursuant to Section 42-61.2-7(b)(3)(iii); and

12

     (iii) To IGT, all sums due and payable under the Video Lottery Agreement.

13

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

14

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

15

of net terminal income of authorized machines Video Lottery Terminals at Newport Grand, except

16

that effective November 9, 2009, until June 30, 2013, the allocation shall be one and two tenths

17

percent (1.2%) of net terminal income of authorized machines Video Lottery Terminals at Newport

18

Grand for each week the facility operates video-lottery video lottery games on a twenty-four-hour

19

(24) basis for all eligible hours authorized; and

20

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

21

River-Tiverton's facility the Tiverton gaming facility, located in the town of Tiverton, to the town

22

of Tiverton one and forty-five hundredths percent (1.45%) of net terminal income of authorized

23

machines Video Lottery Terminals at the licensed, video-lottery retailer's facility located in the

24

town of Tiverton Tiverton gaming facility, subject to subsection (g)(2); and

25

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

26

income of authorized machines Video Lottery Terminals at Twin River the Lincoln gaming facility

27

except that:

28

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

29

five hundredths percent (1.45%) of net terminal income of authorized machines Video Lottery

30

Terminals at Twin River the Lincoln gaming facility for each week video-lottery video lottery

31

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

32

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

33

ch. 151, article 25 as amended, section 4, is approved statewide and in the Town of Lincoln, the

34

allocation shall be one and forty-five hundredths percent (1.45%) of net terminal income of

 

LC004693/SUB A/3 - Page 18 of 29

1

authorized video-lottery terminals Video Lottery Terminals at Twin River the Lincoln gaming

2

facility, subject to subsection (h)(2); and

3

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

4

terminal income of authorized machines Video Lottery Terminals at the Lincoln gaming facility

5

Park, up to a maximum of ten million dollars ($10,000,000) per year, that shall be paid to the

6

Narragansett Indian Tribe for the account of a Tribal Development Fund to be used for the purpose

7

of encouraging and promoting: home ownership and improvement; elderly housing; adult

8

vocational training; health and social services; childcare; natural resource protection; and economic

9

development consistent with state law. Provided, however, such distribution shall terminate upon

10

the opening of any gaming facility in which the Narragansett Indians are entitled to any payments

11

or other incentives; and provided, further, any monies distributed hereunder shall not be used for,

12

or spent on, previously contracted debts; and

13

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

14

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

15

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

16

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

17

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

18

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

19

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

20

frequently than annually.

21

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

22

is authorized to fund the marketing program as described in the UTGR master contract.

23

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

24

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

25

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

26

amended from time to time) shall be paid on a frequency agreed by the division Division, but no

27

less frequently than annually.

28

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

29

is authorized to fund the marketing program as described in the Newport Grand Master Contract.

30

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

31

7(h), the allocation of net, table-game revenue derived from table games at Twin River the Lincoln

32

gaming facility is as follows:

33

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

34

remaining into the general fund:

 

LC004693/SUB A/3 - Page 19 of 29

1

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

2

61.2-7(f)(1)(ii);

3

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

4

Lincoln gaming facility shall be allocated starting from the commencement of table games activities

5

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

6

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

7

game retailer's net terminal income for the prior state fiscal year, at which point this additional

8

allocation to the state shall no longer apply to such table-game retailer.

9

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

10

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

11

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

12

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

13

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

14

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

15

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

16

is as follows:

17

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

18

shall be allocated to the town of Tiverton;

19

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

20

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

21

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

22

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

23

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

24

fiscal year and each subsequent state fiscal year that such Tiverton gaming facility offers patrons

25

video-lottery video lottery games and table games for all of such state fiscal year, if the town of

26

Tiverton has not received an aggregate of three million dollars ($3,000,000) in the state fiscal year

27

from net, table-game revenues and net terminal income, combined, generated by such the Tiverton

28

gaming facility, then the state shall make up such shortfall to the town of Tiverton out of the state's

29

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

30

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

31

video-lottery video lottery games or table games are no longer offered at a facility in the town of

32

Tiverton gaming facility, owned by Twin River-Tiverton, LLC, then the state shall not be obligated

33

to make up the shortfall referenced in this subsection (g)(2); and

34

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

 

LC004693/SUB A/3 - Page 20 of 29

1

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

2

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

3

effective upon the first date that a facility in the town of Tiverton gaming facility owned by Twin

4

River-Tiverton offers patrons video-lottery video lottery games and table games, the allocation of

5

net, table-game revenue derived from table games at the Twin River in Lincoln gaming facility

6

shall be as follows:

7

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

8

allocated to the town of Lincoln;

9

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

10

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

11

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

12

that a facility in the town of Tiverton owned by Twin River-Tiverton the Tiverton gaming facility

13

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

14

that state fiscal year and each subsequent state fiscal year that such the Tiverton gaming facility

15

offers patrons video-lottery video lottery games and table games for all of such state fiscal year, if

16

the town of Lincoln has not received an aggregate of three million dollars ($3,000,000) in the state

17

fiscal year from net, table-game revenues and net terminal income, combined, generated by the

18

Twin River facility in Lincoln gaming facility, then the state shall make up such shortfall to the

19

town of Lincoln out of the state's percentage of net, table-game revenue set forth in this subsection

20

(h)(2) and net terminal income set forth in subsections (a)(1) and (a)(6); provided further however,

21

if in any state fiscal year either video-lottery video lottery games or table games are no longer

22

offered at a facility in the town of Tiverton gaming facility, owned by Twin River-Tiverton, LLC,

23

then the state shall not be obligated to make up the shortfall referenced in this subsection (h)(2);

24

and

25

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

26

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

27

     SECTION 6. Authorization and Empowerment of State Lottery Division with respect to

28

Twin River. Notwithstanding any provisions of the General Laws of the state or regulations adopted

29

thereunder to the contrary, including, without limitation, the provisions of chapter 2 of title 37,

30

chapter 61 of title 42, and chapter 64 of title 42, the Division is hereby authorized and empowered

31

to enter into an amendment to the UTGR Master Contract, or an amended and restated UTGR

32

Master Contract (the "UTGR Master Contract Amendment"), which shall:

33

     (1) Extend the term of the UTGR Master Contract through the Extended Expiration Date

34

under the terms and conditions set forth therein, as amended pursuant to this Section 6 and as may

 

LC004693/SUB A/3 - Page 21 of 29

1

be otherwise amended in accordance with its terms;

2

     (2) To obligate Twin River to build a fifty thousand (50,000) square foot expansion of the

3

Lincoln Gaming Facility, which expansion shall be reviewed and approved by the Division;

4

     (3) To obligate Twin River (directly or through another affiliate of TRWH) to lease at least

5

twelve thousand (12,000) square feet of commercial space in Providence through at least the

6

Extended Expiration Date (the "Twin River Providence Lease Obligation");

7

     (4) To grant the Division the right to terminate the UTGR Master Contract if:

8

     (i) TRWH (directly or through another Affiliates of TRWH) fails to perform the Twin

9

River Investment Obligation; or (ii) Twin River fails to perform the Twin River Providence Lease

10

Obligation, in addition to any rights the Division has to terminate the UTGR Master Contract; and

11

     (5) With the prior approval of the Division, consolidate the Initial Promotional Points

12

Program and the Supplementary Promotional Points Program applicable to the Lincoln Gaming

13

Facility and the Initial Promotional Points Program and the Supplementary Promotional Points

14

Program applicable to the Tiverton Gaming Facility into the Consolidated Promotional Points

15

Program, and further provide that Twin River and Twin River-Tiverton, collectively, and not each

16

individually, may issue to customers and prospective customers of the Lincoln Gaming Facility

17

and/or the Tiverton Gaming Facility Promotional Points in an aggregate amount up to the sum of

18

(a) twenty percent (20%) of the aggregate Net Terminal Income for the Lincoln Gaming Facility

19

and the Tiverton Gaming Facility for the Prior Marketing Year and (b) one million five hundred

20

thousand dollars ($1,500,000), the foregoing superseding and replacing any law applicable to the

21

Lincoln Gaming Facility relating to Promotional Points that Twin River may issue to customers

22

and prospective customers of the Lincoln Gaming Facility; and

23

     (6) Contain such other or such revised terms and conditions as the Division and Twin River

24

may agree.

25

     SECTION 7. Authorization and Empowerment of State Lottery Division with respect to

26

Twin River Tiverton. Notwithstanding any provisions of the General Laws of the state or

27

regulations adopted thereunder to the contrary, including, without limitation, the provisions of

28

chapter 2 of title 37, chapter 61 of title 42, and chapter 64 of title 42, the Division is hereby

29

authorized and empowered to enter into an amendment to the Twin River-Tiverton Master

30

Contract, or an amended and restated Twin River-Tiverton Master Contract (the "Twin River-

31

Tiverton Master Contract Amendment"), which shall:

32

     (1) Extend the term of the Twin River-Tiverton Master Contract through the Extended

33

Expiration Date under the terms and conditions set forth therein, as amended pursuant to this

34

Section 7 and as may be otherwise amended in accordance with its terms;

 

LC004693/SUB A/3 - Page 22 of 29

1

     (2) With the prior approval of the Division, consolidate the Initial Promotional Points

2

Program and the Supplementary Promotional Points Program applicable to the Lincoln Gaming

3

Facility and the Initial Promotional Points Program and the Supplementary Promotional Points

4

Program applicable to the Tiverton Gaming Facility into the Consolidated Promotional Points

5

Program, and further provide that Twin River and Twin River-Tiverton, collectively, and not each

6

individually, may issue to customers and prospective customers of the Lincoln Gaming Facility

7

and/or the Tiverton Gaming Facility Promotional Points in an aggregate amount up to the sum of

8

(a) twenty percent (20%) of the aggregate Net Terminal Income for the Lincoln Gaming Facility

9

and the Tiverton Gaming Facility for the Prior Marketing Year and (b) one million five hundred

10

thousand dollars ($1,500,000), the foregoing superseding and replacing any law applicable to the

11

Tiverton Gaming Facility relating to Promotional Points that Twin River-Tiverton may issue to

12

customers and prospective customers of the Tiverton Gaming Facility; and

13

     (3) Contain such other or such revised terms and conditions as the Division and Twin

14

River-Tiverton may agree.

15

     SECTION 8. Further authorization and empowerment of State Lottery Division with

16

respect to affiliates of TRWH. Notwithstanding any provisions of the General Laws of the state or

17

regulations adopted thereunder to the contrary, including, without limitation, the provisions of

18

chapter 2 of title 37, chapter 61 of title 42, and chapter 64 of title 42, the Division is hereby

19

authorized and empowered to enter into a contract with Twin River, Twin River-Tiverton or another

20

Affiliate of TRWH (the "TRWH Technology Provider License Agreement") whereunder such

21

Affiliate of TRWH would be a Technology Provider on or before October 1, 2020 through

22

December 31, 2021, and have the right to provide, and shall provide, all Video Lottery Terminals

23

provided to the Division other than those that IGT and its Affiliates have a right to provide pursuant

24

to applicable law and efficiency formulas existing as of the effective date of this act for the term of

25

the TRWH Technology Provider License Agreement; provided, however, nothing in this act shall

26

limit the authority of the Division to approve the Video Lottery Terminals and Video Lottery

27

Games provided pursuant to the TRWH Technology Provider License Agreement. The TRWH

28

Technology Provider License Agreement shall contain such other terms and conditions as the

29

Division may require.

30

     SECTION 9. Naming rights agreement. Notwithstanding any provisions of the General

31

Laws of the state or regulations adopted thereunder to the contrary, the I-195 Redevelopment

32

District Commission (the "195 Commission") is hereby authorized and empowered to enter into a

33

contract with an Affiliate of TRWH whereunder such Affiliate of TRWH would agree to pay one

34

hundred thousand dollars ($100,000) per year for the period from July 1, 2020 and expiring on the

 

LC004693/SUB A/3 - Page 23 of 29

1

Extended Expiration Date , or some portion thereof at the election of the 195 Commission, for the

2

right during such period to name a park or a portion thereof within the I-195 Redevelopment

3

District, the naming rights for which are controlled by the 195 Commission, and containing such

4

other terms and conditions as the 195 Commission and the Affiliate of TRWH may agree (the

5

"Naming Rights Agreement"). If the 195 Commission declines to enter into a Naming Rights

6

Agreement with an Affiliate of TRWH, there shall be no adverse effect to TRWH or its Affiliates

7

under this act or any of the agreements referenced in this act.

8

     SECTION 10. Amendments to regulatory agreement involving TRWH and affiliates of

9

TRWH. Notwithstanding any provisions of the General Laws of the state or regulations adopted

10

thereunder to the contrary, the Division and the state of Rhode Island department of business

11

regulation (the "DBR") are hereby authorized and empowered to enter into an amendment to the

12

Amended and Restated Regulatory Agreement dated November 13, 2019 among the Division, the

13

DBR, TRWH, Twin River Management Group, Inc., UTGR, Inc. and Twin River-Tiverton, LLC

14

(the "Amended and Restated Regulatory Agreement"), which amendment (the "Regulatory

15

Agreement Amendment"), among other things, shall:

16

     (1) Authorize and permit an Affiliate of TRWH to invest in the Joint Venture;

17

     (2) Authorize and permit TRWH or an Affiliate of TRWH to pay six million five hundred

18

thousand dollars ($6,500,000) to IGT or the Division (at IGT's election) in connection with the

19

payment of the Second Intangible Asset Purchase Price;

20

     (3) Exclude from financial tests and other covenants in the Amended and Restated

21

Regulatory Agreement sale-leaseback transactions relating to Rhode Island assets and permitting

22

such transactions subject to the review and approval of the Division and the DBR subject to the

23

requirement that the net proceeds received from the sale-leaseback transaction be used to repay

24

debt unless otherwise approved or agreed by the Division or the DBR and that the buyer-lessor of

25

the relevant Rhode Island assets be licensed by the Division to assure that the assets continue to

26

meet all of the regulatory requirements imposed to protect the State's financial interests and the

27

integrity of the gaming experience;

28

     (4) Increase the "Maximum Leverage Ratio" to the lesser of 5.5:1 (or such greater ratio as

29

the Division and the DBR decide is appropriate to adjust for periods the Lincoln Gaming Facility,

30

the Tiverton Gaming Facility and other gaming facilities owned by Affiliates of TRWH are closed

31

due to the COVID-19 pandemic) and the consolidated total net leverage ratio specified in the

32

TRWH Credit Agreement (as amended from time to time), but using the methodology set forth in

33

the Amended and Restated Regulatory Agreement (as amended from time to time) to calculate the

34

"Leverage Ratio," through the Extended Expiration Date, and, for purposes of calculating the

 

LC004693/SUB A/3 - Page 24 of 29

1

"Leverage Ratio," for the period beginning on the JV Effective Date and continuing through the

2

Extended Expiration Date, modify the definition of (a) "Consolidated EBITDA" to include any

3

income TRWH earns from the Joint Venture or records as income under generally accepted

4

accounting principles as EBITDA and reduce the "VLT Addback" for TRWH's proportionate

5

ownership share of the Joint Venture and (b) "Indebtedness" to exclude "Capital Lease Obligations"

6

entered into in connection with a sale-leaseback transaction provided that both the transaction and

7

the use of proceeds occur in accordance with the provisions of subsection (3) of this section (all

8

terms in quotations in this subsection (4) are as defined in the Amended and Restated Regulatory

9

Agreement);

10

     (5) Authorize and permit an Affiliate of TRWH to make capital expenditures to design,

11

develop and construct the fifty thousand (50,000) square foot expansion of the Lincoln Gaming

12

Facility;

13

     (6) Require TRWH and Twin River Management Group, Inc. ("TRMG") to use their best

14

efforts to locate additional senior management level employees in the state; and further require that

15

TRWH and/or TRMG add no fewer than thirty (30) members of the senior management employees

16

of TRWH and/or TRMG in the state within twenty-four (24) months from the passage of this act

17

(the "Senior Management Employee Location Obligation"). Said thirty employees shall be paid, in

18

each calendar year, aggregate compensation (which shall include pre-tax deductions made on

19

behalf of employees) not less than the product of: (1) Thirty (30); (2) Two thousand eighty (2,080);

20

and (3) Two hundred fifty percent (250%) of the minimum wage in effect from time to time

21

pursuant to Section 28-12-3 of the General Laws (the "Senior Management Compensation

22

Obligation"). The Senior Management Employee Location Obligation and the Senior Management

23

Compensation Obligation shall be in addition to any other employment requirements in the

24

Amended and Restated Regulatory Agreement (as amended from time to time) and the General

25

Laws of the state. The Division shall have the right to access liquidated damages against TRWH or

26

TRMG if there is a failure to satisfy the Senior Management Compensation Obligation for any

27

calendar year, commencing with the calendar year ending on December 31, 2023. Said liquidated

28

damages shall be equal to the product of (A) the difference between the actual number of employees

29

less than the thirty employees required under the Senior Management Employee Location

30

Obligation and (B) six thousand four hundred dollars ($6,400). TRWH and/or TRMG shall provide

31

to the Division an annual certification on or before May 1 of each year certifying that TRWH and/or

32

TRMG is in compliance with the employment obligations under this subsection for the prior

33

calendar year.

34

     (7) In addition to TRWH's obligations under Section 7.5(d) of the Amended and Restated

 

LC004693/SUB A/3 - Page 25 of 29

1

Regulatory Agreement, authorize and obligate TRWH (directly or through Affiliates of TRWH) to

2

invest or cause to be invested by TRWH, an Affiliate of TRWH or an Eligible Third Party in the

3

state during the period between the effective date of the Regulatory Agreement Amendment and

4

the Extended Expiration Date, in the aggregate at least one hundred million dollars ($100,000,000)

5

(the "Twin River Investment Obligation"), which, with the Division's prior approval, shall be

6

expended in connection with: (i) Expanding and improving the Lincoln Gaming Facility and the

7

Tiverton Gaming Facility and developing or improving real property surrounding the facilities; (ii)

8

Performing under the UTGR Master Contract, as amended by the UTGR Master Contract

9

Amendment; (iii) Performing under the Twin River-Tiverton Master Contract, as amended by the

10

Twin River-Tiverton Master Contract Amendment; (iv) Performing under the TRWH Technology

11

Provider License Agreement (including, without limitation, all Video Lottery Terminals purchased

12

by Affiliates of TRWH through December 31, 2021 ); (v) Performing under the Naming Rights

13

Agreement; (vi) Performing under the Amended and Restated Regulatory Agreement, as amended

14

by the Regulatory Agreement Amendment; and (vii) performing the Twin River Providence Lease

15

Obligation; provided, however, in no event shall TRWH receive credit toward performance of the

16

Twin River Investment Obligation more than once in connection with any expenditure; and

17

     (8) Authorize and permit TRWH and Affiliates of TRWH to take such other actions as are

18

necessary to fulfil the purposes and intention of this act with the agreement or approval of the

19

Division and the DBR.

20

     SECTION 11. Effective dates of amendments and agreements contemplated by this act.

21

Notwithstanding any provisions of this act or any provision of the General Laws of the state or

22

regulations adopted thereunder to the contrary: (1) The IGT Master Contract Amendment (which,

23

among other matters, will extend the term of the VLT Agreement through the Extended Expiration

24

Date), the UTGR Master Contract Amendment, the Twin River-Tiverton Master Contract

25

Amendment, and the Regulatory Agreement Amendment shall take effect on the same date; and

26

     (2) No such agreements shall take effect until all such agreements take effect.

27

     SECTION 12. Credit for acquisitions and expenditures. With respect to the performance

28

of the Second IGT Investment Obligation and the Twin River Investment Obligation under this act,

29

no acquisition and/or expenditure shall be permitted to be credited to both IGT and TRWH. In the

30

event of a disagreement between IGT and TRWH with respect to the allocation of a credit for an

31

acquisition and/or expenditure, the determination of whether IGT or TRWH is allocated said credit

32

shall be solely determined by the Division.

33

     SECTION 13. Reporting and Compliance.

34

     (a) Amendments – The Division shall provide notice of any further amendment(s) or

 

LC004693/SUB A/3 - Page 26 of 29

1

letter(s) of agreement which alter any of the obligations of IGT, TRWH, or the Joint Venture as set

2

forth in the IGT Master Contract, the IGT Master Contract Amendment, the UTGR Master

3

Contract, the UTGR Master Contract Amendment, the Twin River-Tiverton Master Contract, or

4

the Twin River-Tiverton Master Contract Amendment to the Permanent Joint Committee on State

5

Lottery, the Speaker of the House, and the President of the Senate no later than ten days (10) from

6

the effective date of such amendment or agreement, along with a summary explanation of what the

7

amendment or agreement provides and both the fiscal and economic impact of those changes;

8

provided, however, that no amendment or letter of agreement shall alter or modify, in any way, any

9

provision of this authorizing legislation.

10

     (b) Not less than every two years, the Division shall request the Commerce Corporation to

11

perform audits to ensure IGT's compliance with its employment and compensation obligations

12

under the terms and conditions set forth in the IGT Master Contract, the IGT Master Contract

13

Amendment, and this act, as each may otherwise be amended from time to time. The Commerce

14

Corporation shall perform said audits and shall forward the completed audit reports to the Division

15

within thirty (30) days of the end of the measuring period. Within ten (10) days of the date the

16

Division receives the audit reports from the Commerce Corporation, the Division shall forward a

17

copy to the Permanent Joint Committee on State Lottery, the Speaker of the House, and the

18

President of the Senate.

19

     (c) Not less than every two years, the Division shall request the Commerce Corporation to

20

perform audits to ensure TRWH’s compliance with its employment and compensation obligations

21

under the terms and conditions set forth in the UTGR Master Contract, the UTGR Master Contract

22

Amendment, the Twin River-Tiverton Master Contract, the Twin River-Tiverton Master Contract

23

Amendment, the Amended and Restated Regulatory Agreement, and this act, as each may

24

otherwise be amended from time to time. The Commerce Corporation shall perform said audits and

25

shall forward the completed audit reports to the Division within thirty (30) days of the end of the

26

measuring period. Within ten (10) days of the date the Division receives the audit reports from the

27

Commerce Corporation, the Division shall forward a copy to the Permanent Joint Committee on

28

State Lottery, the Speaker of the House, and the President of the Senate.

29

     (d) Reports of any and all audits performed relating to IGT’s, the Joint Venture’s, UTGR’s,

30

Twin River’s, Twin River-Tiverton’s, or another Affiliate of TRWH’s service as a Technology

31

Provider’s services in the State of Rhode Island shall be forwarded to the Permanent Joint

32

Committee on State Lottery, the Speaker of the House, and the President of the Senate, within seven

33

(7) days of the completion of any audit report; provided, however, summaries of IT security, cyber

34

and penetration audits shall be provided to the General Assembly.

 

LC004693/SUB A/3 - Page 27 of 29

1

     (e) Efficiency Reporting – The Division shall prepare an annual efficiency report which

2

reflects the measure of Video Lottery Terminal performance during the first thirteen (13) weeks of

3

each calendar year and shall forward said report to the Permanent Joint Committee on State Lottery,

4

the Speaker of the House, and the President of the Senate on or before May 15th of each calendar

5

year. Said report shall include an explanation/rationale for any decision by the Division regarding

6

the allocation or reallocation of Video Lottery Terminals as well as an impact assessment of the

7

reallocation of Video Lottery Terminals, if any, or of any determination to not make any

8

reallocation of VLTs.

9

     (f) Contract Compliance – The Division shall prepare an annual report summarizing any

10

findings by the Division of noncompliance with any terms and conditions set forth in the IGT

11

Master Contract, the IGT Master Contract Amendment, the UTGR Master Contract, the UTGR

12

Master Contract Amendment, the Twin River-Tiverton Master Contract, or the Twin River-

13

Tiverton Master Contract Amendment as each may otherwise be amended from time to time and

14

any penalties assessed and any remedial actions taken by the Division in response to such

15

noncompliance through the Extended Expiration Date. Said report shall be forwarded to the

16

Permanent Joint Committee on State Lottery, the Speaker of the House, and the President of the

17

Senate.

18

     SECTION 14. Inconsistencies. Insofar as the provisions of this act are inconsistent with

19

the provisions of any other general or special law of the state, the provisions of this act shall control.

20

     SECTION 15. Agreement. The state and IGT agree that the provisions of this act are not

21

intended to modify in any way the relative rights and obligations of the Division and IGT under the

22

IGT Master Contract Amendment.

23

     SECTION 16. This act shall take effect upon passage.

========

LC004693/SUB A/3

========

 

LC004693/SUB A/3 - Page 28 of 29

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

ENABLING THE STATE LOTTERY DIVISION OF THE DEPARTMENT OF REVENUE TO

CONTRACT WITH IGT GLOBAL SOLUTIONS CORPORATION AND TWIN RIVER

***

1

     This act would enable the state lottery division of the department of revenue to enter into

2

a contract extension with IGT Global Solutions Corporation and contract extensions with Twin

3

River and affiliates of Twin River.

4

     This act would take effect upon passage.

========

LC004693/SUB A/3

========

 

LC004693/SUB A/3 - Page 29 of 29