You Reap What Youb Sow

Yet another debacle brought on by RI elected officials AGAINST the stated desires of the citizens of the state multiple times. And now we are supposed to acquiesce to the PURCHASE of this mess because our politicians have trapped us by irresponsible budgeting?
This state's politico already HAVE a reputation for corruption and insider deals. How do ya think THIS will work?

Pathetic.

New RI slogan: "Lasciate ogni speranza voi ch'entrate "
from Dante's "Inferno".


(and for the non-Italian speakers: Abandon all hope, ye who enter here)


R.I. Ponders Buying Out Ailing Casino
By Eric Moskowitz, Globe Staff February 5, 2009
LINCOLN, R.I. - Rhode Islanders marveled when the seedy old Lincoln Greyhound Park was transformed by investors into a lavish gambling salon, with a map of the state etched into the terrazzo marble floor and soaring columns fashioned to appear like autumn oaks.
But the legions of new gamblers that were supposed to flock to the glitzy slot parlor, rebranded as Twin River and purchased and renovated at a cost of nearly $700 million, never came. Its operators cannot meet heavy debt obligations and have defaulted on the terms of their loans. Bankruptcy threatens.
So to avoid the risk of a closure and the loss of $250 million the slot machines generate annually for state coffers, the state's politicians are considering ways to keep it open, including a possible purchase - an unprecedented move that would make Rhode Island the first state to own a "racino."
For states, the choice facing Rhode Island starkly illustrates the dangers that accompany the rewards of legalized gambling.
Twin River provides Rhode Island's third-largest revenue source, behind only the income and sales taxes. For state officials grappling with huge deficits created by the recession, it has become, in the recent parlance applied to bank bailouts, too big to fail.
"We're so deep into it," said John J. Cullen, a Lincoln resident and longtime critic of expanded gambling who nonetheless sees the logic of a state buyout. "The state has become addicted to the revenue source."
Rhode Island's general treasurer, Frank Caprio, first proposed a buyout if Twin River fails to right itself. Other prominent officials have jumped on board, including the speaker of the Rhode Island House, saying it must be considered.
Governor Donald L. Carcieri, a Republican, has retained a national law firm and equity analysts to advise him on how to respond to Twin River's financial crisis. Until the studies are done, Carcieri is withholding judgment, said Amy Kempe, the governor's spokeswoman. She called talk of a state takeover "sheer speculation," but said Carcieri has not ruled it out.
"The state needs to stand ready, if this facility is forced into receivership or bankruptcy," Caprio said in an interview.
Caprio likened the proposal to buying a foreclosed home, not to bailing out a Wall Street bank. The state could conceivably purchase Twin River at a discounted price, perhaps $250 million, and hire its own casino manager, he said. Twin River could remain open, and the state could conceivably collect an even greater percentage of house winnings than the 60 percent it currently receives under state law, he said.
Twin River's owners hope to renegotiate their estimated $525 million in debt, or cut a new deal and pay the state less than its current percentage - something state officials have steadfastly refused to do. If they can't do those things, a sale to the state, bankruptcy filing, reorganization, or a post-failure state takeover are all possibilities, said Patti Doyle, a Twin River spokeswoman.
The idea of a taxpayer-financed bailout or a takeover has some state residents worried.
"The state has plenty of things they can spend their money on, rather than bailing out a semi-casino," said Matt Buteau, 34, of Smithfield, who works for an oil and gas company.
The Rev. Dr. Donald C. Anderson, executive minister of the Rhode Island State Council of Churches and a gambling opponent, said putting state officials in full control of Twin River could lead to an expansion from the current slot parlor to a full-blown casino with blackjack, craps, and other games.
"There could be temptation here for the state to see expansion of gambling as one way to dig itself out of this hole," Anderson said.
Yet some think it's not a bad idea. "I think it could be a moneymaker in the right hands," said Kerri Maloney, 45, a self-described "day-care mom" from Greenville. Although she does not favor gambling, "if it's in our state, I'd rather we have control over it."
The operators are BLB Investors LLC, a partnership that includes Len Wolman and Sol Kerzner, who developed Mohegan Sun in Connecticut and also are the investors in a proposed Mashpee Wampanoag casino in Middleborough. They first missed a debt payment early last year and have received multiple extensions from lenders.
Chief lender Merrill Lynch Capital Corp. is "continuing discussions with all parties and interests," spokesman Bill Halldin said Sunday, as talks continued.
Twin River already won the right from Rhode Island officials to operate 24 hours a day on weekends and holidays, over the objections of Lincoln residents. But local and national economic woes have continued to take a toll. Rhode Island's 10 percent December unemployment rate ranked second among the 50 states.
The gross amount of money gambled rose to about $2 billion last year, but to encourage that higher rate of gambling, Twin River has given away increasing amounts of money in winnings and frequent-gambler rewards programs. That left less than $193 million to be divided among the state, Twin River, and other parties from July through December 2008, down from $215 million in the first half of the year.
"It's almost like a perfect storm in terms of circumstances forcing the owners to take a hard look at their debt and say, 'We need to take a step back, and we need some assistance,' " said Doyle.
Those who track casino gambling say there is no precedent for a state takeover, though government ownership is the rule in Canada, where the casinos are owned by the provinces but managed by contractors. In 2007, Kansas became the first US state to legalize casino gambling in a Canadian-style fashion, but it has yet to open its first casino, according to the American Gaming Association.
Some academics say state ownership in Rhode Island may be a mistake.
"I think we've got to do whatever we can to help Twin River get out of the situation they're in," short of buying it, said Edward M. Mazze, a professor and former business school dean at the University of Rhode Island. "If [you] thought casinos that were run without the state had an air of gangsterism, just imagine when the state runs it. I mean, this state cannot run itself."