R.I. considers gambling expansion

The state is facing a deficit, and it's all about money.
HARTFORD COURANT
LINCOLN, R.I. -- Like hungry seagulls circling Narragansett Bay, some of the world's largest gambling companies are hunting for a once-in-a-lifetime chance to bite into one of the United States' most lucrative casino markets.
Who could blame them? This is Rhode Island, and the appetite for gambling is ravenous. Average annual spending on scratch tickets and video lottery machines in this tiny state tops out at more than $1,000 a person.
"You are not going to stop people gambling. If they don't do it here, they are going to go to Connecticut," said Phil Beaulieu, 68, as he headed into Lincoln Park for a recent morning of gambling on video lottery terminals. "Let's keep the money in the state of Rhode Island."
As always with gambling, money -- piles of it -- is behind all the talk about jobs and economic development a casino might bring. For the state, hundreds of millions of dollars in new tax revenue is at stake. For casino titans MGM Mirage, Harrah's and Kerzner International, more gambling is a rare opportunity to capture sought-after patrons from Rhode Island and Massachusetts.
"The answer for us is all about the revenue. The moral issues have already been debated," said Senate President Joseph A. Montalbano, who noted the state is facing a deficit of $190 million. "I think there will be a proposal on the ballot" for voters to consider this fall, he said.
Competition for Conn.
If Rhode Island expands gambling, this could bring the first real competition Connecticut-based Foxwoods and Mohegan Sun have seen -- and start carving into the $400 million in slot machine revenue the state of Connecticut collects annually.
Industry leaders also see Rhode Island as perhaps the last opportunity to crack the New England market, with Massachusetts appearing unlikely to approve a casino, Maine rejecting tribal gambling and Connecticut effectively ruling the region.
"You get your foot in the door, and you own the whole house," said Bill Newby, a managing director with Bank of America who oversees investments in casinos.
"The number of people in that part of the world within 150 miles is huge. If you build it, they will come. You are going to capture a lot of traffic going up and down I-95."
The question is whether it will be at a new Indian casino or at a dressed-up dog track that features thousands of video lottery terminals, devices that look and play like slot machines. Or both.
At Lincoln Park, the dog track where they have already shoe-horned 2,300 VLTs into the grandstands, Las Vegas giant MGM Mirage wants to create a larger, more elaborate "racino."
But MGM Mirage is being challenged in its bid to buy Wembley PLC, the British company that owns Lincoln Park, by a partnership called BLB Investors that includes Kerzner International and a Connecticut developer, the Waterford Group.
Grand visions
Both MGM Mirage and BLB have visions of creating a grander, casinolike attraction on the sprawling dog track property, which provides nearly all of the revenue for Wembley PLC. This week, Kerzner's group raised its bid for Wembley PLC to about $555 million, slightly more than MGM Mirage bid two weeks ago.
Wembley is being forced to sell out in the wake of a scandal in which managers of Lincoln Park were indicted on charges of trying to bribe state officials in return for expanding video lottery terminals at the dog track and keeping a full-blown casino out of Rhode Island.
Meanwhile, Harrah's is presenting its proposed casino as a joint effort with the Narragansett tribe, whose members are distant cousins of Connecticut's Mashantucket Pequots.
Although they are federally recognized, the Narragansetts are prohibited by law from opening a casino without approval from state residents.