Twin River’s offer to run the state lottery seems to be in response to dissatisfaction with IGT’s status within the industry and state affairs. If the lottery does see a change of hands, then over 1 100 citizens could lose their jobs. Twin River proposes a different idea in order to create more employment opportunities instead.
Governor Raimondo of Rhode Island seems adamant that she does not want Twin River Holdings Inc. (the state’s one and only casino operator) to usurp the current lottery manager – International Game Technology (IGT).
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The background is that the lottery is the 3rd largest revenue generator of the state. Twin River has put down an offer aimed at Rhode Island, a whopping $125 million upfront, to takeover Ocean State’s lottery contracts from IGT.
The Governor’s argument against this movement is mostly based on the fact that the lottery is not the business that Twin River is accustomed to, as well as, the fact that it is the state’s 3rd largest source of revenue – making it rather important to place in the hands of someone she feels isn’t right for the job.
Going back a little further to explain where Twin River’s seemingly random offer comes from is that it stems from the company’s recent bashing of the Governor’s decision to dedicate a 20-year-long contract to IGT to run the bulk of the gambling machines situated at the Tiverton and Twin River Casinos – the two gaming properties on Rhode Island.
Upon further investigation, this situation seems to have degenerated into a downright squabble. The point that Twin River is trying to make is that Rhode Island allows for one gaming manufacturer to control up to half of the devices within the state means that IGT’s slice of the pie is fast approaching 85%.
This would mean that the lottery has allowed IGT to slowly accumulate a dominant share of the entirety of the state’s gaming machine market. In addition to this, Twin River states that IGT devices feature retired concepts and lower yields, which translate to decreased revenue for Rhode Island if compared to competing firms and their products. In light of such revelations, other critics of Raimondo’s agreement with IGT have spoken up.
Another aspect of the Governor’s reluctance to agree with Twin River’s request is their status as a public company. Her view is that they are owned by a “hedge fund.” This may have some basis as many of the largest Twin River shareholders are hedge funds. However, there are many other kinds of shareholders, as well.
Many have commented that this is an odd quibble to have from a former venture capitalist like the Governor. Another question that has arisen is why does she not have an issue with IGT’s status as a public company?
The public will have to see how this plays out, but so far it seems that both sides need to clear up their reasons for their proposals.
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