Twin River Worldwide Holdings, the operator of Rhode Island’s two casinos, has agreed to pay a $180,000 fine to the state and increase the amount it spends annually to improve its Lincoln gambling venue to settle a dispute that saw the state accuse the casino operator of violating an important condition of its gaming license.
The dispute, which stemmed from the gambling company’s debt levels, reached its apex this summer when Twin River opposed vocally the Gov. Gina Raimondo’s administration proposal to extend gambling technology giant IGT’s contract with the state Lottery without holding a bidding process.
IGT provides the majority of slot machines at Twin River’s two casinos in Rhode Island as well as the computer system that connects the gambling devices. The casino operator said over the summer that IGT’s machines have underperformed over the past several years, especially when compared to the average revenue generated by slot machines by other providers.
Breach of License
Under the terms of its gaming license from Rhode Island authorities, Twin River cannot exceed a 4:1 ratio of debt to revenue generated by its two casinos in the state. The casino operator became a publicly traded company following its merger with Dover Downs Gaming & Entertainment earlier this year.
In May, Twin River sought to change the terms of its debt and reward shareholders with dividends and stock buybacks. According to state filings, the move pushed the debt ratio to 4.5:1.
The company said that it had been given assurances from state officials that its debt limit would be raised. However, the state reneged after the casino operator initiated a campaign against the IGT deal.
According to a letter from Twin River President and CEO George Papinier dated August 26, “everything changed after we opposed the IGT deal.” The letter read further that a senior member of Gov. Raimondo’s administration “warned a member of my staff that there would be consequences if we opposed that deal.”
In a letter from early September, Rhode Island Lottery Director Gerald Aubin and Department of Business Regulation Director Elizabeth Tanner said that the claim that the state had agreed to change Twin River’s license terms was “patently false.”
Josh Block, a spokesman for Gov. Raimondo, said that the dispute between the state and the casino company had nothing to do with IGT’s license extension.
The Settlement
Under a 2016 agreement between Twin River and Rhode Island, the casino company is required to annually spend at least $5 million on upgrades at its Lincoln casino.
To settle its recent dispute with the state, the operator has agreed to pay a $180,000 fine and to spend at least $12 million on casino improvements in Lincoln for three years starting from January 2020.
The gambling company has also waived its right to seek changes in its debt limit until June 2020. Twin River has not admitted any fault in its settlement with the state which was made public this past Monday.
Source: Settling a contract fight, Twin River to pay $180K fine, spend twice as much as usual on Lincoln casino, ProvidenceJournal.com
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