Casino Profits and Budget Shortfalls

Beyond the sloganeering, here is the budgetary aspect of the casino debate in a nutshell…

  1. Harrah’s is going to take money away from Newport Grand and Lincoln Park. Even the study that casino supporters paid for says that.
  2. Because the state gets about 60% of gambling revenue from Lincoln in Newport, while it is projected to get about 25% from the proposed Harrah’s deal, the state will lose money every time a gambler decides to spend his or her gambling money at Harrah’s instead of at Newport or Lincoln. This could result in a net loss of revenue for the state.
  3. Legally mandated “slippage” payments, where the state must pay Newport and Lincoln after the construction of a new casino if certain revenue targets are not met, further increase the likelihood that a Harrah’s casino will cost the state money.
  4. But, according to the terms of the deals currently being discussed, Harrah’s and the Narragansett Tribe can still make huge profits, even as their business drives the state into budget shortfalls totalling hundreds of millions of dollars per-year.
In light of this, two important questions that you need to consider when voting in November on Question 1 and for your state legislators are…
  1. If the proposed casino creates big profits for Harrah’s at the same time it creates a state budget shortfall, what will be the response of Narragansett Chief Sachem Matthew Thomas when it comes time for him to collect his share of the profits? Will the attitude be “a deal is a deal, I got mine, and a budget shortfall is your problem”, or will some kind contingency plan where the Narragansetts (and Harrah’s) defer their profits be considered?
  2. Can Rhode Island taxpayers afford to leave the details of a casino deal in the hands of a legislature that is probably too dumb and/or too corrupt to structure a deal that includes safeguards to prevent a private corporation from making a huge profit while it depletes the state budget? Do we perhaps need to replace some of the legislators who have already spurned the public interest by voting for a no-bid casino deal with legislators who will better protect the interests of Rhode Island taxpayers?

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Bobby Oliveira
Bobby Oliveira
14 years ago

Dear Carroll,
Point #2 is totally out of context. If that’s the kind of “math” you’re going to use, must be a Carcieri or Tom Coyne supporter, it is not a surprise that you cannot judge the issue fairly.
Point number 4 suffers from the same problem.
Question #2 only shows that you belong to our local chapter of the fellowship of the miserable. By the way, many of the details are known. The template was put together 2 years ago.
Again, for the 8000th time, in order to replace people, you need candidates. In order to draw candidates, you need ideas beyond “casino bad and corrupt, BLB, also in gaming and expanding, good.”
One last note: a lot of those candidates you do have are taking $1000 contributions from G-Tech. When the lottery giant comes calling, how are they going to say no??

Greg
Greg
14 years ago

Hmm. I spend $100 at Lincoln Park. The state gets $60.
I spend $100 at Harrah’s. The state gets $25.
I can’t figure out how that $35 difference in income to the state ISN’T a loss of revenue. Please enlighten me.
Then, to add insult to injury, the income from the casino that will supposedly go to tax relief ($144 million if you believe the made up crap Harrah’s is shoveling) will have to go pay back a good chunk of the lost income to Lincoln Park because I decided to go to Harrah’s to lose my shirt.
Harrah’s says this loss of income won’t happen, so I assume they’ll be more than happy to write into their contract with the state that they will pay any slippage in perpetuity, right?

Rhody
Rhody
14 years ago

Jan Jones and GTECH: two lobbying entities not used to hearing the word “No.”
One hundred years after Upton Sinclair wrote about Rhode Island being for sale, things haven’t changed.

Greg
Greg
14 years ago

“One hundred years after Upton Sinclair wrote about Rhode Island being for sale, things haven’t changed.”
And in November, we’ll see if the natives of this state really are stupid enough to put out the big “EVERYTHING MUST GO” sign and give up the state to the casino.
Of course, it won’t really matter since the question and what it would do are clearly unconstitutional under the “Equal Protection” clause and it will get tossed out and we’ll be back here in 2 years to try again cuz Tim Williamson wants that yacht, dammit!

Bobby Oliveira
Bobby Oliveira
14 years ago

Dear Greg,
Let’s build in a pretend community. In this community, there are two restaurants:
The first restaurant serves “take out” and in our pretend community, their average “ticket” is about $9, they’re not that big, maybe 30 customers per hour. As government, we actually own the grills and fryolators and pay the owners a 40% commission.
The second restaurant is a sit down 5-star. The average ticket is $200, over 100 customers per hour. Since they are sit-down, we tax meals there at 25%. They also have a huge out of state customer base.
Which restaurant will outperform the other in tax revenue at the end of the year?

Greg
Greg
14 years ago

Bobby, the problem with your idiotic hypothetical is that, in the real world, Lincoln Park and Newport have slot machines. Harrah’s will also have slot machines. And better food. And a real ‘Vegas atmosphere’. And shows. And events. and I can play table games if I get tired of slots.
So, toss your hypothetical, live in the real world, and get your head out of your arse.

Tim
Tim
14 years ago

Anyone with even half a brain who looks at the economics of a Harrah’s casino is West Warwick can readily see the negative impact such a facility would have not only on the revenue streams from Lincoln and Newport but on local businesses like restaurants.
We’re not rural Connecticut. We’re the most densely populated state in America and placing a casino right in the middle of this city-state will have all kinds of negative impact.
Take the words of union “economist” (lol) Bobby Oliviera with a major grain of salt.
Bobby just wondering if you got your $5,000 payoff, eerrr…I mean consultant fee from Harrah’s yet?
If a no talent grunt like Frank Montanaro Jr is getting paid off I certainly think Jan Jones can find a extra bill or two in her corset for your fine consultant work.

Bobby Oliveira
Bobby Oliveira
14 years ago

Dear Greg,
Thanks for making my point.
Tim,
When are you going to figure out that the question before you is not “whether there shall be a casino in RI or not” but whether “shall there be one casino in West Warwick operated by Harrah’s to the benefit of the Narragansetts or shall there be two casinos, one in Lincoln owned by BLB and one in Newport owned by a yet unnamed private entity”?
Somewhere along the way, you will figure out that your Governor sold you out on the BLB deal which has a “Part II”.

Greg
Greg
14 years ago

“…operated by Harrah’s to the benefit of the Narragansetts…”
Yeah, they get less than a 5% kiss on the forehead and a thank you for being the wronged minority that Harrah’s needed to guilt the people of Rhode Island into selling out the state. If you call that a real ‘benefit’.

Tom W
Tom W
14 years ago

The “Question 1” change to our Constitution DOES NOT include an ELIMINATION and PROHIBITION of at least one of the three major forms of taxation: sales, income or property. Without that there is NO “guarantee” of “tax relief.”
Second, what commentators haven’t seemed to notice, is that there is NO DEFINITION of “TAX RELIEF.” Even to assume for the sake of argument that there will be a net increase in tax revenue, the General Assembly could just increase spending and claim that the casino provided “tax relief” because were it not for that “new” revenue stream they would have “had to” raise sales / income / property taxes by a like amount.
The history of the General Assembly (and the Democrats’ addiction to spending) only GUARANTEES that they would divert every single additional dime in tax revenue to the public sector unions and the welfare industry.
The average citizen in RI will get NO TAX RELIEF. We didn’t from the Lottery (nor from its multiple expansions since its inception), and we won’t from the casino.

Tim
Tim
14 years ago

On the money Tom W.
Without the Harrahs money being directly targeted to a specific tax there will never be any form of tax relief from this. That’s why Harrahs has quite an elaborate misinformation campaign going. They can’t even tell the truth about who would own this thing. It ain’t no Narraganset Indian casino and never will be. Don’t buy the rheotric (lies) of the Indians buying the place in 15 years. Harrahs doesn’t run around the country building casinos so they can sell them off to Indian tribes. Anyone with a brain understands this tax relief promise is merely empty rhetoric (lies) being used to try go get this thing passed. Of course the ‘anyone with a brain’ caveat eliminates thousand upon thousands of Democrats in this state.

Bobby Oliveira
Bobby Oliveira
14 years ago

Dear Andrew, Taking these one at a time: 1.) The change in the Constitution was made necessary by the Supreme Court. You can still dislike the change, but let’s put responsibility where it should be. 2.) That’s what the last legislation did. 3.) Why is it so hard for some of you to get this? Let me try again. Would you like 60% of $100 or 25% of $500? Even the RIPEC shows an increase in revenue for all facilities. The difference between RIPEC and Dr. Barrow is Dr. Barrow shows a much better understanding of the marketplace. 4.)The Legislature followed a ten year old process. Let us not forget that the Governor originally supported this way. He put words into action when the BLB deal was handled in exactly the same manner. Now, time is of the essence. If a “bidding process” causes us to get behind Massachusetts on timeline, it will cost us more money then the “competition” will create. 5. If the RIPEC had engaged in any kind of “human intelligence”, they would see how flawed that statement is. 75% of Newport Grand’s traffic is from Bristol County, MA. If they wanted casino gaming, they would already be driving by us now. It should also be stated the history of growth of the current 4 facilities operating refutes this point in its entirety. I know, facts, not RIPEC conjecture with bad data, make for stubborn things. The RIPEC assumptions, and that’s what they are – assumptions, on who gambles where and why are laughable. Lastly, I was at the “they’re not walking through that door” press conference. I’ve loved the term ever since. Dear Tim, If we’re so stupid, what does it say about you that we win 80% of the races statewide? Maybe it has something… Read more »

Justin Katz
14 years ago

Just a couple of rhetorical points:

If we’re so stupid, what does it say about you that we win 80% of the races statewide?

Only that there are a greater number of you than us. It doesn’t take superior intelligence for a swarm to overpower an individual.

Maybe it has something to do with good, honest, hard working folks, a majority of whom are “unaffiliated”, not liking being referred to as “stupid”.

That would assume that a majority of such folks ever have (or seek) the opportunity to hear disagreeing arguments. At any rate, it isn’t necessarily a sign of intelligence or of righteousness to rebel against a powerless minority. Moreover, I’d characterize it as “stupid” to eat the toxic dirt that we have down by the water in parts of Tiverton; it would hardly refute my characterization were somebody to eat even more dirt just to spite me.

Tom W
Tom W
14 years ago

>>If we’re so stupid, what does it say about you that we win 80% of the races statewide? Maybe it has something to do with good, honest, hard working folks, a majority of whom are “unaffiliated”, not liking being referred to as “stupid”.
Perhaps it something to do with having 90% of the candidates.
As for stupid voters in Rhode Island:
Exhibit #1: Patrick Kennedy – isn’t it “stupid” to vote for someone who is inarguably stupid?
Exhibit #2: Irons; Celona; Fay; Bevilaqua (2); Harwood (2); Cianci; Bianchini; DeAngelis …

Bobby Oliveira
Bobby Oliveira
14 years ago

Dear Justin,
If we’re so stupid, how come you can’t change it?
Even in the most red of the red states, if we put our minds to it, taking the Legislature in Montana for instance, we compete at a high level.
Tom W,
Why do we have 90% of the candidates? We’re certainly not 90% of the population.

John
John
14 years ago

So, Bobby with all the answers Oliveira (who is clearly not “stupid”):
We’re currently looking at a state budget deficit of between $240 million and $320 million for next year. What’s your plan? Or if you don’t have one, what’s Charlie’s (since, not being stupid, you surely must know)?

Justin Katz
14 years ago

Not sure what you’re trying to say, Bobby. Doggedness does not necessarily correlate with intelligence; if anything, stubbornness correlates with intelligence inversely.
But I’m not really arguing on either side, here. The only thing that I’d presume to declare stupid is this tangent, which is why I’m attempting to scuttle it. The fact that it echoes two name-calling letters currently on the Projo’s Web site (one, two) gives reason to fear that our civic dialogue is headed for an all-time low.

Tom W
Tom W
14 years ago

>>Why do we have 90% of the candidates? We’re certainly not 90% of the population.
Because, by contract, public-sector union flacks get paid time off to “serve” in the General Assembly. Not to mention union fronts like Paul Moura.
OTOH, Republican-inclined people don’t run – they’re too busy trying to make an honest living by attracting customers to engage in a voluntary exchange of goods and services …
Unlike Democrats – public sector employees and welfare recipients – who “make their living” through the parasitic extraction, via compulsory taxation, of other peoples’ money.

Bobby Oliveira
Bobby Oliveira
14 years ago

Dear Tom W,
As usual, the facts do not bear out what you say. Then again, reading from the talking points you read from, I’m not surprised.
There are 113 members of the current General Assembly. Not counting police and fire personnel, since you’ve already agreed they are not “hacks”, there are only 7 members connected in any way to unions.
The second most popular “occupation” after that of lawyer, for Democrats, would be that of “owner”.
Would you like to try again?

Bobby Oliveira
Bobby Oliveira
14 years ago

Dear Andrew,
1.) Every time in the past someone headed down that road, they were told it was too vague. Now, it’s too specific. As usual, the anti-gaming forces want 10 sides of every issue.
2.) There is no chance at all that this proposal will reduce revenues. There is of course the chance, which I admit too freely, that some may attempt to outspend the increase in revenue.
3.) You and I both know that there is a law of diminishing returns out there somewhere. However, this facility does not come close to hitting it provided it is up and running before Massachusetts gets their act together.

Stretch Cunningham
Stretch Cunningham
14 years ago

Bobby, you fail to mention the enormous, incestuous and self-feeding monster the Democrat way of doing business has created.
I spend most of my working days in Massachusetts. On any given day, it may take me 20 – 30 minutes to get from Cranston to the Attleboro/Pawtucket line. On any of those holidays that government workers get off, but the rest of us stiffs do not… 5 MINUTES!
The state is bloated with government workers whose very special interest is best served by the continuation of high-tax, big spending, union-serving policies of the Democrat majority.
Its not stupidity, it’s INJUSTICE!

Bobby Oliveira
Bobby Oliveira
14 years ago

Dear Stretch,
Be happy you don’t live in Hawaii which employs 41 workers for every 1,000 residents.
In this category, we rank 20th according to the census bureau. (By the way, due to recent immigration waves not calculated into the ranking, we may be lower)
In short, the number of employees thing is just another RI myth.
That is not to say you’re not experiencing what you say you are. I am saying there’s a different reason for it.

rhodeymark
rhodeymark
14 years ago

The second most popular “occupation” after that of lawyer, for Democrats, would be that of “owner”
I would love to see that percentage split if you have it handy – both of Newport’s (D) lawyer incumbents are running unopposed.
There is of course the chance, which I admit too freely, that some may attempt to outspend the increase in revenue
Refreshing – since we’re talking about gaming, I wish I was able to take those odds.
However, this facility does not come close to hitting it provided it is up and running before Massachusetts gets their act together
That is now twice you’ve mentioned playing ‘Beat the Clock’ regarding Mass gamblers being the key to the scheme. What happens after they decide to build over there anyway? Looks like falling revenues predecated on an overwhelmingly in-state transfer of wealth from the greedy lambs to the greedy wolves.
My wife and I enjoy the satellite NFL at Newport Grand for out of market games. She also enjoys doing what she refers to as the “Walk of Shame” to see how many locals she recognizes doing the catatonic communion on our way out. If it really is only 25% Rhode Islanders (as you state), then I expect Prop 1 to fail easily.

Greg
Greg
14 years ago

If Harrah’s really wanted a FAIR constitutional change to allow them to function in the state they would simply have changed ONE word.
They would have changed “…lottery….OWNED by the state…” to “…lottery….REGULATED by the state…”.
But no, that wasn’t good enough for them. They needed a monopoly, too.

Tom W
Tom W
14 years ago

Bobby –
>>There are 113 members of the current General Assembly. Not counting police and fire personnel, since you’ve already agreed they are not “hacks”, there are only 7 members connected in any way to unions.
I commend, and admire, police and fire personnel for the job they do, and the hazards they face.
But I don’t commend, e.g., the “disability retirement” scam that goes on in Providence, which makes the police and fire personnel that participate in it as slimy as, e.g., Celona.
Similarly, when they are in the General Assembly de facto representing the unions rather than the populace as a whole, they are hacks.
>>Be happy you don’t live in Hawaii which employs 41 workers for every 1,000 residents. In this category, we rank 20th according to the census bureau. (By the way, due to recent immigration waves not calculated into the ranking, we may be lower)
Yeah, but there are a lot of “off the books” quasi-government employees in RI, i.e., all of the “employees” of “social service” agencies that get most or all of their funding from federal / state welfare reimbursements and grants.
Many of them are growing, serving that “immigration wave” of poor people that we’re importing from Central America … and they ain’t coming to RI because of our nicer weather, but for our nicer welfare climate.

JJAmes
14 years ago

“One last note: a lot of those candidates you do have are taking $1000 contributions from G-Tech. When the lottery giant comes calling, how are they going to say no??”
— Posted by Bobby Oliveira —
Good point! They might need to take a lesson from YOUR candidates when they recieve their $1000 contributions from the teacher and state employee unions and memebers.

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