Private owners of the state operated casino at Twin River want lawmakers to increase the subsidy for the casino’s marketing efforts in Rhode Island from $3.7 million to $7.3 million a year, reports Providence Journal. They argue that more marketing money will mean more revenue for the facility and state. They ask lawmakers to back a bill that would potentially double the state’s share of those costs.
Currently, the state contributes $3.7 million, the first $4 million comes from Twin River, and then the state pays a share as marketing expenses run from $4 million to $10 million. The bill would create a second tier of marketing expenses, with Twin River covering expenses from $10 million to $14 million and the state’s expenses from $14 million to $20 million.
Twin River general counsel Craig Eaton said that each dollar spent on marketing results in up to $1.50 in “net terminal income” from the facility’s video lottery terminals. Twin River believes that the efforts could bring in at least $9 million in additional VTL revenue, with the state retaining nearly 62%.
State Lottery Director Gerald Aubin opposes the bill because it would give Twin River’s owners more flexibility in deciding what constitutes marketing expenses. The change would allow expenses for staff salaries and travel expenses, subscriptions, consulting fees, promotions, and cleaning supplies to be included. “Twin Rivers could spend less on their overall marketing initiatives, but still benefit from the maximum reimbursement by the state,” he said.
Committee members held the bill for further study.
One of the bills would allow the casino to extend lines of credit of up to $75,000 to gamblers. The other bill creates a new class of liquor license allowing the casino to sell alcohol until 2 a.m. on Friday and Saturday nights as well as on federal or state holidays.
The state’s share of the VLT revenue has fallen short of expectations since Twin River became a full-fledged casino, and the state’s share of the revenue from the higher-paying video-slots is down.
The state is projecting VLT revenues to drop during the fiscal year that ends June 30, from $316.4 million to $309.4 million. The state predicts a slight uptick next year, to $313.4 million, but the larger state share of marketing costs would come out of the state’s share of the revenue.
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