Chapter 033

Chapter 033

2003 -- S 1011 SUBSTITUTE A

Enacted 05/02/03


A N  A C T




     Introduced By: Senators Irons, J Montalbano, Algiere, Ruggerio, and Celona

     Date Introduced: April 10, 2003



It is enacted by the General Assembly as follows:


     SECTION 1. Purpose. The purpose of this act is to induce GTECH Corporation to

construct, develop and maintain its new global corporate headquarters facility in the Capital

Center District of the City of Providence and to expand its manufacturing operations in the Town

of West Greenwich. This act, being necessary for the welfare of the state and its inhabitants, shall

be liberally construed to effectuate its purposes.

     SECTION 2. Authorized procurement of Master Contract. Notwithstanding any

provisions of the general laws or regulations adopted thereunder to the contrary, including, but

not limited to, the provisions of Chapter 2 of Title 37, and Chapter 61 of Title 42, the Rhode

Island Lottery Commission (“Commission”) is hereby authorized and empowered to enter into a

Master Contract (“Master Contract”) with GTECH Corporation, a Delaware Corporation

(“GTECH”), which would have a term of twenty (20) years from its effective date for the

following purposes:

     (a) to amend the terms and conditions of the Video Lottery Central Computer System

Agreement between GTECH and the Commission, dated as of December 20, 2001;

     (b) to amend the terms and conditions of the On-Line Gaming Agreement between

GTECH and the Commission, dated January 29, 1997 and as amended thereafter;

     (c) to amend the terms and conditions of the Video Lottery Terminal Technology

Provider License Agreement dated September 28, 2000; and

     (d) to allow GTECH to purchase from the Commission for a payment of $12,500,000 the

right to be exclusive provider to the Commission of information technology hardware, software

and related services pertaining to:

     (i) the design, development, implementation and/or operation of Video Lottery Central

Communications Systems;

     (ii) the design, development, implementation, operation, and/or sales of On-Line Games;


     (iii) the processing of On-Line Game Wagers and Video Lottery Wagers. For purposes of

determining compensation, “NTI” means “Net Terminal Income.” The Commission is hereby

empowered to fix in the Master Contract the annual compensation to be paid to GTECH provided

such annual compensation does not exceed the following percentage formulae:

      Lottery                                                      Percentage

      (Calculated Annually)


     Sales to $275 million                                     5.00%

     Sales from $275-$400 million                         1.00%

     Sales above $400 million                               5.00%


      VLT Central System

      (Calculated Annually)


     NTI up to $500 million                                  2.50%

     NTI from $500 million-$1 billion                     1.00%

     NTI above $1 billion                                     2.50%


      VLT Machines

     (Average daily income calculated on weekly basis)


     NTI up to $325                                             7.00%

     NTI from $325-$500                                     1.00%

     NTI above $500                                           7.00%


     Under the terms of the Master Contract authorized under this act, GTECH agrees that in

consideration of a twenty (20) year agreement with the Commission, GTECH shall undertake,

among others, the following obligations:

     (a) GTECH (or a GTECH business affiliate) will develop and construct a new office

building of at least 210,000 square feet to be constructed in the Capital Center District in the City

of Providence and GTECH will relocate and maintain its world corporate headquarters in that

facility for the twenty (20) year term;

     (b) GTECH will expand its manufacturing operations in the town of West Greenwich;

     (c) GTECH (or a GTECH business affiliate) will invest in the aggregate on or before

December 31, 2008, at least $100,000,000 in the state (“Investment Requirement”), in connection

with acquiring interests in land, building development projects or improvements to real property

or facilities and performing its obligations under the Master Contract, including, without

limitation, the provision of goods in connection with its business operations in Rhode Island

(“Investment Requirement Assets”); and

     (d) GTECH will employ within the state during each calendar year, beginning in calendar

year 2006, during the term of the Master Contract with the Commission, at least 1,000 full-time

active employees at wage levels not less than those defined in Rhode Island general laws section

42-64.5-2(7) (“Employment Requirement”).

     The Master Contract authorized under this act shall contain provisions which provide that

the Commission may terminate the Master Contract if GTECH fails to fulfill the Investment

Requirement on or before December 31, 2008, or if GTECH does not meet the employment

requirement in any calendar year after 2005.

     As used in this section, the term “GTECH business affiliate” shall mean any corporation,

trust, partnership, joint venture or any other form of business entity which (acting jointly with

GTECH or at the direction of GTECH) owns, leases or finances Investment Requirement Assets

which are used by GTECH in its business operations in the state.

     SECTION 3. Inconsistent provisions. Insofar as the provisions of this act are inconsistent

with the provisions of any other general or special law, the provisions of this act shall be

controlling and the limitations set forth in section 42-61.2-1(1) shall not apply to the Master


     SECTION 4. Agreement of the state. The state does hereby pledge and agree with

GTECH under this act that the state will not limit, alter, diminish, or adversely impact the rights

or economic benefits which vest in GTECH under the terms of the Master Contract authorized

hereby, unless authorized by this act.

     SECTION 5. Effective date. This act shall take effect upon passage.



LC03058/SUB A