Rhode Island lottery tug of war continues

by William Brown Last Updated
Scientific Games provides leading lottery tech to German operator 

A major competitor in the worldwide gambling market has jumped back into the Smith Hill debate over a proposed no-bid, 20-year lottery contract for International Game Technology with an offer to give the state a better deal.

Providence Journal reports IGT pushed back on Monday against the effort by the Las Vegas-based Scientific Games to regain a piece of Rhode Island’s gambling business – instant tickets – that it lost in 2017.

IGT chairman Robert Vincent also pushed back against critics saying the reworked legislation up for a hearing at the State House “weakens” the definition of the kinds of jobs that would count toward IGT’s 1,100-job commitment to Rhode Island.

Rather than weakening the bill, Mr Vincent said the added language “tightens” it, by reflecting the way IGT’s current contract has been interpreted since 2005, including, for example, the full-time contract employees in the company’s print shop.

He provided a copy of the development agreement the company, then known as GTECH, had with the state’s Economic Development Corporation.

More than 1000 jobs created by IGT

Signed on January 4, 2005, it included in the definition of qualifying employees, “employees of outsourcing and consulting service providers and temporary employees retained through an employment agency in the state.”

“Let’s go back to the beginning,” Mr Vincent said.

“The timing for this deal could not be any more important than it is today. There aren’t many companies here in Rhode Island that are knocking on the door looking to guarantee 1,100 jobs, good-paying jobs at significant salaries … and a presence in Providence.

Putting the contract in financial context, IGT derived more than $45.2 million from its Rhode Island Lottery contracts during the fiscal year that ended June 30.

That includes $5.6 million from its role in providing instant scratch tickets, and the video-slot and sports wagering activity at the two casinos.

The instant ticket contract is the one Scientific Games wants a chance to bid on.

As for where the company stands mid-pandemic, Mr Vincent said most staff have not returned to IGT’s downtown headquarters, but of the “approximately 300 Rhode Island workers that were furloughed, approximately half have returned to work. We are making good progress in gradually bringing the others back on board when the circumstances warrant it.”

“For a whole host of political or commercial reasons, people try to pick apart the threads and say, ‘Oh we could do this better or we could do that better,” Mr Vincent said, describe Scientific Games’ appearance as a “last gasp” effort to win back an instant ticket contract the Lottery shifted to IGT – without bidding – in 2017.

“If the state wanted them, they would still be there,” Mr Vincent said.

Scientific Games’ counter-argument is based on this finding by the House leadership’s consultant.

“By only providing instant tickets from one supplier, Rhode Island is not only leaving potential instant roles on the table, that spending is being exported to Massachusetts,” the consultant said.

“Over the past 10 years, this is equivalent to $2.5 billion in lost opportunities in top line sales, $510 million in General Fund Contributions, $130 million in retailer commissions and $1.78 billion in prizes that have not been generated,” Scientific Games said in a memo provided to legislators.

“If the Rhode Island Instant Ticket program performed at the average of the New England State Lotteries, the state would realise an additional $254 million per year in top line sales, which generates an additional $51 million per year in General Fund Contributions, $13 million additional in retailer commissions and an additional $178 million in prizes to the players.”

“If the Legislature decided to award a comprehensive Instant Ticket program through a fair and full competition, Scientific Games would be delighted to compete,” the memo said.

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