| 6/20/2012 |
Revenue Protection Act signed into law
STATE HOUSE – The governor today signed the Revenue Protection Act that was approved by the General Assembly last week. The legislation was adopted to protect state revenue, maintain the competitiveness of the state’s two gaming facilities, and safeguard those employed by Rhode Island gaming facilities.
A recent report examined the potential impact of casino gaming in Massachusetts to Rhode Island. It was determined that a significant portion of the State’s gaming revenue is generated from Massachusetts customers. Casino gaming in Massachusetts will have a significant negative impact on gaming facilities, which will adversely impact state gaming revenue. If the voters approve table gaming in Rhode Island, this legislation will provide the necessary tax and regulatory framework to quickly implement these games to help mitigate the negative impact of Massachusetts casino gaming.
The legislation establishes the state’s share of table game proceeds at 18 percent at both facilities. At Twin River in Lincoln, that rate would be lowered to 16 percent should the facility experience a sustained drop in revenue. Should VLT revenues decline, the Town of Lincoln will receive 1 percent of table game revenue from the facility’s share for a four-year period to help the host community transition during a period of revenue decline. Current projections show that Twin River stands to generate $60 million annually in estimated table game revenue when fully operational.
At Newport Grand, which is a smaller facility and envisions far fewer table games, the table game rate would remain at 18 percent. However, there would be a 1.5 percent increase to its share of video lottery terminal (VLT) revenues, which would come from the state’s share of VLT revenue. Should VLT revenues decline, the City of Newport will also receive 1 percent of table game revenue from the facility’s share for a four-year period to help the host community transition during a period of revenue decline. Current projections show that Newport Grand stands to generate $5 million annually in estimated table game revenue when fully operational. Additionally, the share of VLT revenue directed to the host communities of Lincoln and Newport would be permanently increased to 1.45 percent. Currently, the share of VLT revenue for Lincoln is 1.45 percent, but sunsets every year. For Newport, the current share of VLT revenue is 1.01 percent.
It should also be noted that if a referendum fails in one community, the referendum in the other community may still be approved to authorize table gaming at one of the two existing gaming facilities.
The legislation would also boost the promotional points program authorized at the facilities – a program which rewards VLT players by providing free gaming experiences to players. Such programs often translate into higher gaming activity for players taking advantage of the points, and therefore increased revenues. According to the Division of Lottery, promotional points programs have been shown to produce more than double in return on investment. The program, currently set at 4 percent of prior year’s net terminal income for both facilities, would increase to 10 percent with the intent of increasing revenues to be shared between the facilities, towns, and state.
The bill provides for strong state regulatory enforcement through the Division of Lottery, including administrative penalties of up to $1,000 per violation, and addresses the need for problem gambling services. Both facilities will be required to work with the Division of Lottery to provide funding and offer problem gambling programs, including a player-self exclusion program and a problem gambling hotline.
Signed into law by the governor were companion Senate and House bills –(2012-S3001A) introduced by Sen. Maryellen Goodwin (D-Dist. 1, Providence) and(2012-H8213Aaa) introduced by Rep. Helio Melo (D-Dist. 64, East Providence).
For more information, contact:
Randall T. Szyba, Publicist
State House Room 20
Providence, RI 02903
(401) 222-2457 |
LEGISLATIVE INFO
