October 5, 2008
Should the State Purchase Twin Rivers?
In the event their financial troubles lead to foreclosure, General Treasurer Frank Caprio has proposed, though not as a first option, the state purchase of Twin Rivers. The Treasurer further proposes to do so without voter approval. (By the way, where have we heard about a chunk of the taxpayers' change being spent against taxpayer will? Oh, yes.)
Certainly if the worst happened to Twin River, due to the condition of the real estate market, anyone purchasing the operation's land and all improvements at foreclosure auction would do so at an advantageous price. Say the bidding stopped at half of the assessed value of $186,036,888. Even setting aside the state's $400 million annual deficit, would $93,000,000 be a prudent use of tax dollars for such a purpose?
Suppose the bidding stopped much lower and the state were able to acquire the property at a real bargain. The big picture question becomes: is it a good thing for the state to own a gambling venue?
I still cannot fathom how a casino loses money.
State ownership of Twin Rivers would make its employees government workers, no? Union, healthcare, pension, political clout.
I say "no." There are plenty of business ventures whereby the state might make some money, but that isn't the role of the state.
Posted by: Justin Katz at October 5, 2008 11:15 AMI think state ownership would be a terrible idea. I think the present role of the state in gambling- its own lottery and its "partnerships" with Twin River and Newport- puts the state in the role of the huckster- encouraging bad financial behavior- by gamblers and by state decision-makers like. This is regressive taxation that no one should support. If we are going to have gambling it should be a private entity that is regulated by the state. Regulation should be the state's role.
Posted by: David at October 6, 2008 5:53 PMThe state shouldn't have much trouble finding a buyer. Twin River's handle for July and August was up considerably over '07, while Foxwoods' and Mohegan's went down. The place is turning a nice operating profit - the jomokes who currently own it are getting killed on the debt service from overambitious expansion.
Posted by: rhody at October 7, 2008 1:03 AMActually, that's a good point, Rhody. Presumably due to the spike in gas prices - people don't want to drive as far for a night out.
In the event, then, the state were so ill-advised as to participate in a foreclosure auction, hopefully, we'd be outbid.
Posted by: Monique at October 7, 2008 6:46 AM