After a months-long spat, International Game Technology (IGT) and Twin River Worldwide Holdings (TRWH) Inc. are teaming up in Rhode Island. They have announced a partnership that includes the creation of a new company aimed at keeping the Ocean State competitive with neighboring Connecticut and Massachusetts.
For Twin River, the operator of Rhode Island’s two casinos, the announcement is a stunning reversal of position from where the company stood with IGT just a few months ago. Last July, TRWH ran a full-page ad in the Providence Journal, claiming Gov. Gina Raimondo’s plan to award a $1 billion, 20-year contract to IGT was bad for state’s gaming industry and taxpayers, alleging the deal wasn’t put out to bid.
TRWH also asserted that the Rhode Island Lottery allowed IGT to amass a dominant share of gaming devices on the state’s casino floors, one that exceeded the maximum allowed by law, while calling IGT machines “the worst.”
Now, the companies are working together to create a new firm that will cement IGT’s lynchpin status in Rhode Island.
The new joint venture will be established effective January 1, 2022,” according to a statement. “The companies will make various investments that will result in IGT having a controlling 60% stake in the new company and Twin River owning the remaining 40%.”
The newly formed entity will supply Rhode Island Lottery with all of its video lottery terminals (VLTs) and gaming devices. But the mix will include “IGT-manufactured machines and multiple other manufacturers.” Once that effort is operational, IGT will start with a 40 percent market share that can rise or fall depending on how its devices perform relative to rivals’ machines.
Under the terms of the agreement, the aforementioned 20-year pact IGT was seeking with Rhode Island appears to be back in play. In fact, TRWH said it’s going to pick up part of the tab for the deal, which has been heavily scrutinized by policymakers from both parties.
“IGT will continue to seek General Assembly approval for legislation authorizing the governor to extend its contract through 2043,” said the companies.
There’s a $25 million licensing fee associated with the contract, and assuming Ocean State lawmakers authorize it, TRWH will cover $6.5 million of those costs.
That accord isn’t a done deal yet. In a report commissioned by Rhode Island Republicans and authorized by state Democrats, the majority party there, gaming industry consulting and research firm Christiansen Capital Advisors questioned the wisdom of such a long contract, noting standard state agreements of that nature run for 10 years, not 20, with renewal clauses.
TRWH is also pledging a $100 million investment in its namesake gaming property in Lincoln, R.I. That will add 40,000 square feet of gaming space, a 14,000-square foot spa, and fresh adjustments to further divide the venue’s non-smoking and smoking areas.
Additionally, the company is committing to a 12,000-square foot headquarters in downtown Providence.
All of this just months after Raimondo, a Democrat, chastised TRWH for being run by hedge funds and serving the interests of its shareholders, not Rhode Island taxpayers.