A last-minute bill filed on behalf of the state’s sole casino operator cleared a Rhode Island Senate committee hearing after roughly 10 minutes Wednesday, despite strong objections from the Rhode Island Lottery. Now it’s set to sprint toward a floor vote in the full chamber on Tuesday.
The bill introduced on May 23 by Senate Majority Leader Frank Ciccone, a Providence Democrat, would increase the cap for reimbursements Bally’s Corp. receives from the Rhode Island Lottery for its marketing costs. But the legislation really serves as a contingency plan should lawmakers push forward legislation to ban smoking at the company’s Lincoln and Tiverton properties.
Ciccone confirmed that he introduced the legislation at the request of Bally’s as a way to make up for anticipated lost revenue if a smoking ban is enacted this year. For years, unionized workers, public health advocates and progressive lawmakers have pushed to end the loophole that exempts Bally’s casinos from an indoor smoking ban.
Bally’s Twin River in Lincoln and Bally’s Tiverton Casino & Hotel allow patrons to smoke, while casinos in Massachusetts and Connecticut are smoke-free. Bally’s projects it could lose $20 million annually if smoking were fully banned at the Lincoln and Tiverton casinos, said the company’s spokesperson Patti Doyle.
“As we look to the possibility of the smoking ban being enacted, we need as many tools in our arsenal as possible to bring back any lost revenue to the state,” Doyle said.
Ciccone has long opposed banning smoking at the two casinos, saying he believed it would mean lost revenue.
“I just feel that the people who are here are because they can smoke and gamble — it’s as simple as that,” Ciccone said in an interview. “If that closes, you’re going to lose a small percentage of them.”
The Rhode Island Lottery is responsible for reimbursing Bally’s under different rate structures — one for the Lincoln facility and one for the Tiverton casino. Both casinos have been regulated under two-tiered rates since 2010, when Tiverton’s license was still held by Newport Grand under different ownership.
In Lincoln, the state reimburses 60.7% of all casino marketing expenditures between $4 million and $10 million. The state pays nothing for Bally’s marketing expenditures over $10 million up to $14 million, then reimburses 60.7% of expenditures between $14 million and $17 million.
In Tiverton, the state reimburses 60.1% of marketing expenditures between $560,000 and $1.4 million. Doyle said the Tiverton casino was capped at the lower end because its contract was tied to the now-defunct, smaller Newport Grand tier structure.
During the fiscal year ending on June 30, Rhode Island Lottery projects Bally’s Lincoln will be reimbursed a total of $3,640,800 for marketing expenditures, while Bally’s Tiverton will be reimbursed a total of $506,890, said lottery spokesperson Paul Grimaldi.
But if Ciccone’s bill becomes law, Grimaldi said, Bally’s Lincoln would have been reimbursed $6,068,000 and the Tiverton casino would have been reimbursed $844,816 — representing a nearly $2.8 million increase.
Lottery Director Mark Furcolo’s interpretation of the legislation is that the state would have to reimburse Bally’s at a rate of approximately 60.5% up to a cap of $27.25 million.
“Should Bally’s spend more than it has during the last three fiscal years, there would be a greater impact to the state,” Furcolo wrote to the committee.
As we look to the possibility of the smoking ban being enacted, we need as many tools in our arsenal as possible to bring back any lost revenue to the state.
Furcolo said he was not opposed to the idea of consolidating Bally’s marketing program from an administrative standpoint, but he doesn’t believe the state should be on the hook for additional reimbursement.
He added that amending any new contract would require a “time-consuming legal undertaking” and could conflict with the Lottery’s plans to issue a request for information on potentially expanding the number of online sports betting apps available in the state.
Despite Furculo’s opposition, the Senate Committee on Labor and Gaming voted 6-0 to advance Ciccone’s bill at its initial hearing Wednesday. Not present were Democrats Ryan Pearson of Cumberland, Ana Quezada of Providence, and Brian Thompson of Woonsocket. Ciccone joined the panel in his ex-officio role as majority leader.
Ciccone’s bill is scheduled to be voted by the full Senate on Tuesday, chamber spokesperson Greg Paré said in an email Thursday. Companion legislation has not been introduced in the House.
Momentum to make casinos smoke-free has grown in the House, where Speaker K. Joseph Shekarchi is one of 10 cosponsors listed on the latest edition of a bill sponsored by Rep. Teresa Tanzi, a South Kingstown Democrat. The House Committee on Finance held an initial hearing on Tanzi’s bill on April 10, when it was held for further study — as is standard practice for a first look by a legislative panel. Companion legislation introduced by Sen. V. Susan Sosnowski in February has yet to be heard by the Senate Committee on Labor and Gaming. No hearing date has been set.
Newly-elected Senate President Valarie Lawson, an East Providence Democrat, has stated she personally supports a smoking ban, but indicated she would like to see the standard committee review process play out.
The growing support in the House mirrors overall sentiment in Rhode Island. The AFL-CIO in February released a poll that found nearly seven in 10 survey respondents “strongly” or “somewhat” supported a smoking ban at the state’s two casinos.
This story was originally published by the Rhode Island Current.
