Casino Profits and Budget Shortfalls
Beyond the sloganeering, here is the budgetary aspect of the casino debate in a nutshell…
- Harrah’s is going to take money away from Newport Grand and Lincoln Park. Even the study that casino supporters paid for says that.
- 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.
- 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.
- 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.
- 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?
- 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?