10/4/11

Bay State Racino Will Hurt Twin River

Will Rhode Island have to compete with our Bay State neighbor for future lottery dollars? Based on latest developments coming out of the State House on Beacon Hill, the answer is (and pardon the deliberate pun), “You can bet on it.” Massachusetts legislation enabling “Expanded Gaming in the Commonwealth,” as the bill is titled, has already passed the Massachusetts House and is now before the full Senate. Since the House originated the bill the Senate is expected to make few if any changes to it, and then it will go to the desk of Governor Deval Patrick who has already agreed to sign it into law. This is a quite different and more determined outcome from this time last year, when the legislation floundered on disagreement between the governor and the legislature over how many casinos and slot parlors to authorize.

At that time I wrote a column warning our legislators that failure to place a referendum on advancing Twin River to full casino status before 2012 was going to end up hurting us, and one year later that’s truer than ever. That’s because the Massachusetts legislation includes establishment of one slot parlor, and that parlor could be fast tracked to open for business by June of next year. That will be five months before Rhode Islanders get the chance to save our skin by authorizing, presumably, the upgrade to table games at the Lincoln facility. Sources close to the action in Massachusetts on this issue tell me that a slot parlor located at a race track (making it a “racino” in industry parlance) could be up and running within 90 days’ completion of the required bid process and award of the license.

The racino in question could very well be Plainridge Racecourse in Plainville, home to harness racing and simulcast. That facility is right off Route 495, close to the intersection of Route 95 and within five miles of the Route 1 mega-retail and entertainment venue Patriot Place-Gillette Stadium in neighboring Foxboro. And of course the Wrentham Outlets are close by. The place is tailor-made as a day-tripper gambling venue.

Plainridge is definitely after the slot parlor license, and has the investors to meet the $25 million licensing fee and required $125,000 infrastructure improvement requirement. In fact, so determined is Plainridge to capture the slot parlor that the track’s owners and management have already secured town permits and worked with the MA DOT to reroute traffic.There’s even talk that they have ordered the 1,250 slot machines that will be permitted.

Plainridge also has plans in place to erect a temporary facility to house the one-armed bandits and to erect a permanent expansion to their present clubhouse structure and to build a five-story garage. To them, a slot parlor means survival, as harness racing interest can no longer guarantee financial viability. However, turn Plainridge into a slots parlor with simulcast racing and slots gambling and it’s suddenly a goldmine.

Plainridge will have 3-4 years at least to operate free from competition from a destination casino. (Massachusetts plans to license three full-scale casinos complete with hotels.) During that period its only competition will be Twin River, and that’s the problem for us. Published projections already show that Twin River will be hurt by the Bay State competition when it comes online, but what’s worse is that the competition will start next year.

Despite a recent call from Representative Bill San Bento, who sponsored the 2012 referendum legislation, that RI should consider moving that date up in light of Massachusetts developments, General Assembly leaders Gordon Fox and Theresa Paiva Weed have indicated that they plan to stick with the 2012 general election date. With $300 million in revenues expected from gambling dollars, most of it coming from Twin River, they may come to regret that decision.