September 28, 2007

Was the General Assembly Controlling the Narragansetts' Casino Choice All Along?

Carroll Andrew Morse

According to the Warwick Beacon's Russell J. Moore, the Rhode Island legislature is planning to revisit the gambling issue in the 2008 legislative session. The decision is unsurprising, in light of the State of Massachusetts' apparent plans to allow casinos to be built there...

Larry Berman, a spokesperson for Rhode Island House Speaker William Murphy, said the House is poised to take up the gambling issue when the General Assembly reconvenes in January.

“Come January, when the legislature comes back into session, Speaker Murphy would like to do everything we can to protect Rhode Island’s gambling revenues,” said Berman.

“He wants to have Rhode Island in a position where, if Massachusetts were to bring out three casinos, we’ll be able to respond to that.”

With respect to Massachusetts’ plan, and its emphasis on inviting gambling companies to bid for the licenses, Berman said the legislature sent out feelers before going forward with the Harrah’s/Narragansett Indian casino deal, and Harrah’s was the only bidder interested. It wasn’t until late in the process that casino mogul Donald Trump came forward with a plan that lacked details, and would have held up the process, Berman said.

What is at least a tad surprising is Mr. Berman's description of the casino process that ended last year with the rejection of a constitutional amedment that would have permitted the establishment of a single destination casino in West Warwick. The language of the amendment led people to believe that it was the Narragansett Indians who would be choosing the casino operator for Rhode Island...
Notwithstanding sections 15 and 22 of this Article, and provided that a majority of the electors of the Town of West Warwick have voted to approve this amendment, the establishment of a resort casino and games located therein is authorized in the Town of West Warwick. The resort casino shall be privately owned and privately operated by a business entity established pursuant to Rhode Island law by the Narragansett Indian Tribe and its chosen partner, which entity shall be: (i) legally distinct and separate from the Narragansett Indian Tribe, (ii) subject to the laws of the state of Rhode Island, including regulation and taxation, and (iii) required in its organizing documents to expressly waive any sovereign immunity relating to any and all matters of the resort casino, including compliance with and enforcement of the laws of the state of Rhode Island, and the regulation and taxation thereof. The per annum tax rate shall be established by the general assembly with all of such tax proceeds to be dedicated to property-tax relief, as prescribed by statute
According to Mr. Berman, however, the legislature was directly dealing with multiple casino operators, early on the process. What good were those "feelers" that the legislature -- not the Narragansett Indian tribe, according to Mr. Berman -- was putting out, if the legislature lacked the power to influence or even control the Narragansetts' choice?

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State of RI is not in the position to continue depending on Video Terminal Lottery income from Twin Rivers and Newport Grand to support the state budget. Nor should State of RI (House Speaker William Murphy) expand gambling at Twin Rivers and Newport Grand to include full casino gambling.

Governor Carcieri when asked if Twin Rivers and Newport Grand should be expanded to full casinos in response to Massachusetts casinos made an astonishing intelligent response of no he does not believe expansion is needed to protect RI lottery income.

RI has kept the Narragansett Indians (or with partners) from building a full casino in the state RI on tribal or commercial land. Currently there are ongoing court cases involving State of RI, Governor and Narragansett Indians.

One must ask, if the State of RI has successfully utilized existing or created laws blocking and denying the Narragansett Indians rights to build and operate a casino in competition to State of RI sponsored Twin Rivers and Newport Grand, what law suits (Federal or State) might be filed if State of RI enters into supporting full casino operation in competition with Massachusetts?

RI lottery income from Twin Rivers and Newport Grand is not increasing as projected but falling therefore less money is being sent to state general fund (bad budget management depending on an uncontrollable variable).

The subprime loan crisis is just beginning in RI with over 1,600 bankruptcies and foreclosures being listed across the state this month. Couple that with over building of luxury condos, high state-wide taxes, poor business climate, business layoffs, level funding of schools, rising RI unemployment, exodus of population to other states, $400 million plus RI budget deficit and impending U.S. wide recession, State of RI does not have extra resources nor can afford to allocate extra resources supporting full casino gambling

As and indicator, according to the just released respected 2007 Milken Institute/Greenstreet Partners Best Performing Cities Index, Providence, RI slipped 75 points down to 150 out of 200 metros for ability to grow, retain jobs, wage/salary growth and high-tech gross domestic product growth.
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One must also carefully interpret Mass. Governor Patrick’s statement about “three commercial licensed” casinos. The “three commercial licensed” does not include any federal government recognized Indian casino operating on recognized Indian tribal land.

Mashpee Wampanoag tribe has already indicated they may not seek a commercial licensed but go the federal trust route which may take up to five years before construction begins.

Foxwoods Casino has lost title of world’s largest casino to the Venetian Macao this year however; Foxwoods is currently expanding to regain title. Mohegan Sun Casino is also expanding.

Rhode Island can not compete with neighboring state casinos and base its state budget income on gambling. If RI tries, the downward economy and budget deficit will accelerate.

Posted by: Ken at September 29, 2007 7:04 PM
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