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 TWIN RIVERS
Posted byadmin on Friday, April 16 @ 13:29:39 CDT
Contributed by admin
PROVIDENCE - State lawmakers, in a late-night vote, approved legislation that would ban dog racing, while providing upwards of $3.6 million in new marketing subsidies to the big-name banks and investment houses poised to take control of the bankrupt greyhound track-and-slot parlor in Lincoln.
The legislation approved 56-to-16 by the House would also lower the minimum-employment requirement in a previous agreement with the state; obligate state taxpayers to reimbursing Twin River for any losses resulting from any new in-state competition and give Twin River's owners the right to sue the state for "actual damages" if any arm of the state "enters into any agreement or adopts, modifies or amends any law, rule or regulation that would impair" their rights.
House Finance Committee chairman Steven Costantino sought to convince wary colleagues that the state had more to gain, than lose from the package, including the new marketing subsidy which kicks in after Twin River spends $4 million on its own.
Costantino said it "opens up a myriad'' of new marketing options for Twin River to compete with the two Connecticut casinos, and make more money for the state.
"If they make money, we make money. It is as simple as that,'' he said.
He also downplayed the significance of the state's renewed 2005 guarantee to insulate Twin River against any losses to a new competitor in Rhode Island, saying "There is no imminent casino coming into Rhode Island.''
But he also unveiled a new previously unseen, 30-page version of the Twin River package that left several lawmakers saying they felt uncomfortable voting on anything that long, they had not had a chance to read.
Rep. Arthur Corvese, D-North Providence, objected to making the state liable for Twin River's potential losses to a future competitor, and "mortgaging the future of the taxpayers.''
Rep. Charlene Lima, D-Cranston, questioned why the cash-strapped state should pay more than $3 million annually of Twin River's marketing expenses, saying: "Do not let anybody kid you. This is all about helping the banks make more money by spending more money on marketing which is fine except for the part where they are going to take taxpayer dollars...off our constituents' tables and give it to the Bank of America.''
"Let the banks pay for the marketing, not the taxpayers. It's ridiculous,'' said Lima, who also alleged a "snow job'' by House leaders to confuse and mislead rank-and-file lawmakers about the contents of the bill, including the first made to cover Twin River's losses, in the year before the failed 2006 referendum on a proposed Harrah's-financed Narragansett Indian casino in West Warwick.
But Former House Speaker William J. Murphy defended the overall proposal in light of the increasing likelihood that Massachusetts will compete for Twin River's business, by allowing video-slots at its own tracks. "If we don't act on this,'' Murphy said he would file a bill to change the name from "Twin River to Shallow Brook.''
"Let's look at why the facility is in bankruptcy. We take almost 62 cents out of every dollar out of the place. How is it suppose to survive?'' said House Majority Leader Nicholas Mattiello, D-Cranston.
"There is no bailout. There is no giving of taxpayer money. The taxpayer is wisely investing in one of the best investments in the universe,'' Mattiello said.
Governor Carcieri asked the lawmakers to include the concession package in the $220-million deficit-closing bill up for House debate on Tuesday night, and House Democratic leaders agreed over the strong objections of state General Treasurer Frank T. Caprio, who urged them not to suc*****b to the bankers' efforts to win concessions that would increase Twin River's value at taxpayers' expense.
The privately owned Twin River is home to more than 4,750 electronic video slots plus roulette and blackjack games placed there by the state Lottery under terms in which the state gets to keep roughly 61 cents of each dollar left behind by losing players, a projected $251,038,800 this year.
The push for the legislation comes at a time when the identity of the prospective new owners and operators of the state's largest slot parlor remains fuzzy. Even the debtors in line to take control seem concerned about who might buy enough of the debt to seize control.
The prospective new owners filed an application with the state Department of Business Regulation on Dec. 15 to take over the gambling license.
But DBR and Twin River have refused to make the application public in the months since, though Twin River has acknowledged seeking DBR approval for a new "management team" that includes Glenn Carlin, the former head of the gaming division at J.P. Morgan Securities who served as a financial advisor on the $30.7-billion acquisition of Harrah's Entertainment by Apollo/TPG. Carlin is now a partner in his own hospitality and gaming financial advisory firm, GCET Capital Partners, LLC.
When asked to comment on persistent State House speculation that Apollo/Harrah's has been buying up Twin River debt, Apollo Management spokeswoman Kelly Nugent said: "We have no comment."
State regulators have not been any more forthcoming.
Responding in late March to a series of Journal inquiries, DBR Director Michael Marques acknowledged one or more applications were pending to take control of Twin River's operations, but wrote: "The DBR does not provide status updates to anyone ... When Key Employee applicants are approved, you will be informed... Also, the Facility Permit requires a public hearing before it is approved."
In a disclosure statement filed in U.S. Bankruptcy Court in February, Twin River's debtors raised their own concerns about provisions in the reorganized company's restated bylaws that "could make acquiring control of the reorganized company without the requisite support of its Board of Directors difficult for a third party, even if the change of control would be beneficial to a recipient of New Common Stock."
The bill also provides up to $172,732 in new marketing subsidies for Newport Grand, and the prospect of an additional $1.050 million from a move to make its share of the slot revenue comparable to Twin River's. The disparity dates to the lawmakers' decision to give Twin River more so it could, in turn, share the bounty with its greyhound kennel owners.
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