I voted against putting the gambling question back on the ballot. I think it’s a bad deal for Newport. And as the hours tick toward the end of the state legislative session, it sounds as though it’s getting worse.
I’ve followed the coverage in the Daily News and the Patch and the Providence Journal, but have been excluded from any of the city's direct negotiations with investors, if such negotiations are even taking place . . ..
From what I can gather, it sounds as though the state is proposing a token revenue split for the city in exchange for an affirmative vote on gambling expansion.
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And it doesn't sound as though the token split will close the gambling revenue gap between Newport and Lincoln.
By way of background, the Town of Lincoln received an average of about $6.8 million per year in slot revenue over the last three years. That’s about $600,000 per MONTH. These numbers are publicly available in the Town of Lincoln's FY15 budget.
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Meanwhile, the City of Newport only receives about $400,000 per year ($32k per month) in slot revenue. (Available in OUR FY15 budget).
The massive disparity is partly because Twin River is larger, but also because Lincoln received 1.26% of their slot revenue, while Newport only received 1.01%. (That quarter of a percentage point alone meant over a million dollars to the Town of Lincoln! - Way to go Lincoln elected officials!!!)
Lincoln subsequently increased its share from 1.26% to 1.45% when they approved 24/7 gambling (an additional .19%). And now under current legislation, if Newport votes to approve table games, Newport would also receive 1.45% of slot revenue. In real terms, this might mean an extra $10k per month in slot revenue for the City.
That is the precise deal which was rejected by Newport voters in 2012.
So now, legislators are focusing on sharing a small portion of table game revenue with Newport. But the problem is that table game revenue pales in comparison to slot revenue. If we follow regional trends, table games at Newport will represent only about 8% of slot revenue. So if the state "gives" Newport a 1.01% split of table games revenue, the city will have “sold out” for an extra $2,000 per month. Even if Newport Grand hits projections of $6 million per year in table revenue, a 1% split means Newport will receive $60k per year ($5k/month). And remember - the Town of Lincoln gets nearly $7 million per year, while Newport gets $400,000.
The bottom line is that the city council and city manager should have resolved the revenue split and other issues in a Host Community Agreement. In New England alone, there have been a dozen casino initiatives over the last couple of years. In every single one, the host community entered into an agreement with the casino investors, before the matter was placed on the ballot – except in Newport.
It seems that our city manager and city council leadership were unaware that such an agreement existed in the world of 21st century casino gambling expansion. And unfortunately, our city leaders naively agreed to a casino vote before reaching any terms with the investors.
The City of Newport shouldn’t be in this situation. We voted no to this deal once before, and the deal hasn’t changed much.
Again, I oppose the expansion of gambling, but it seems plain to me that Newport's leaders have been asleep on this issue. The councilors who’ve pushed for table games and gambling expansion in Newport (principally Harry Winthrop and Naomi Neville) should have been aiming for DIRECT revenue of 3-4% to the City for ALL Newport gambling. That is the host community share in Maine, Pennsylvania and Louisiana. We are not going to get anything close to that figure.
Unlike the state legislature, the City of Newport is not exactly desperate for table games. So if Newport's soul is going to be sold for table games to prop up the legislature's lust for gambling revenue, why are our leaders settling for less than what is given to Lincoln, or to communities in other states?
Who is looking out for the best interests of Newport?
Maybe we would be better off asking the Town of Lincoln's elected officials to negotiate a better deal for Newport - because those guys did an amazing job looking out for their community.
Given these important, and unanswered questions, I continue to oppose any expansion of casino gambling in Newport. The current proposal is a great deal for the state legislature, but a terrible deal for Newport.
