House Finance Committee Chairman Steven Costantino takes a break during a hearing Wednesday on several gambling-related bills. For more Assembly news go to B2.

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The Providence Journal / Connie Grosch

PROVIDENCE — The owners of the greyhounds that race at Twin River have rejected a bid by the owners of the Lincoln track and slot parlor to buy out their $9-million-a-year contract.

Under the terms of the offer, Twin River would have paid the dog owners $2 million a year for three years; it would have been up to the dog owners to decide whether to continue live greyhound racing under those terms.

Twin River spokeswoman Patti Doyle disclosed the outcome of the buyout offer Wednesday, the day before a state Senate committee is scheduled to consider a bill introduced by Sen. Frank Ciccone, D-Providence, that would essentially force the slot parlor to continue live racing beyond the announced end of its curtailed racing season in August.

Richard Brindle, president of the Rhode Island Greyhound Owners Association, issued this statement: “We are not looking for a buyout, but to protect jobs. It is our priority to ensure greyhound racing continues at Twin River and that 225 employees are not forced onto the state’s already packed unemployment rolls.”

Doyle’s response: “The offer of $6 million is in sharp contrast to the one they will likely receive in a bankruptcy scenario.”

Doyle said the offer was one of several pieces in an emerging financial package aimed at restructuring Twin River’s half-billion-dollar debt under more affordable terms for the owners of the sprawling Lincoln gambling hall, while averting a state takeover and a once-sought reduction in the state’s anticipated share of the video-slot revenue.

The gambling venue, with 12 greyhound kennels, an estimated 1,200 dogs and 4,752 video slots, is owned by a subsidiary of BLB Investors, which bought the Lincoln Park dog track in 2005, and then embarked on a $225-million renovation and expansion. The partners include Kerzner International Limited, Starwood Capital Group and Waterford Group LLC.

The state has been banking on $246.8 million this year alone from the electronic slot and virtual blackjack machines placed at Twin River by GTECH and other companies under contract with the state Lottery Commission. While revenue expectations have dropped some, gambling remains the third-largest source of state revenue.

Since March 2008, however, when they first defaulted on their loan payments, Twin River’s owners have been struggling to keep their lenders and contractors at bay while avoiding bankruptcy court and to plug an estimated $30-million hole in their operating budget.

On May 5, Twin River announced plans to suspend greyhound racing after running the minimum 125 days of racing required to keep its license. The end date is Aug. 8.

There is precedent. State lawmakers, at the owners’ request, freed Newport Grand in 2003 from having to offer jai alai to operate its own video-slots. Governor Carcieri has said he does not care whether Twin River continues to have dog racing, an expensive holdover that costs the current owners of Twin River between $9 million and $10 million in annual subsidies, while generating a total of $966,211 for the state in 2008. Total wagering on the dogs that year: $13.2 million.

But key senators, including Ciccone — a field representative for the Rhode Island Laborers District Council — are staunch defenders of live dog racing. He said he intends to push ahead with his bill because “there are about 200 employees. That would give them another 125 days of employment. We don’t need to cut jobs right now.”

ON WEDNESDAY, the owners made public for the first time their July 18, 2005 contract with the dog owners. The term of the contract coincides with Twin River’s revenue contract with the state which, with potential renewals, would run until 2020.

Among the key features: a commitment to pay the greyhound owners’ association a $10-million annual racing subsidy, that was reduced to $9 million in September 2008, on top of the dog owners’ share of the live and simulcast racing handle. In all, Twin River payments to the dog owners totaled $11.3 million in 2006, $11.1 million in 2007, and $10.7 million in 2008.

The venue owners also released a profit-and-loss analysis that shows them getting $1.8 million from dog racing in 2008, while spending $2.6 million to run the operation and paying a “contract fee” of $9.7 million. The result: a $10.5-million net loss.

There are only a handful of other places the owners can turn to plug the rest of their revenue hole without reducing the state’s share of the video-slot revenue.

The state currently keeps close to 60 cents of every dollar left behind by losing players, after the winners have been paid. Twin River’s owners get 27.8 percent, an estimated $107.6 million this year. GTECH gets $14.5 million from Twin River as the provider of 2,599 of the video slots, while the other suppliers — IGT and Williams — get their 7 percent share: $10 million and $2.7 million, respectively, according to May estimates. The Town of Lincoln gets an estimated $5.577 million, and the Narragansett Indian Tribe, $662,901.

Doyle said Twin River’s owners have made “significant progress” in recent weeks in their talks with the state and their lenders on a resolution that would keep them out of bankruptcy court. But Gary Sasse, director of the state Department of Administration, said: “While we continue to have constructive conversations, to suggest that a resolution is imminent is in my opinion misleading.”

The House Finance Committee held brief hearings on a trio of bills to increase the number of video-slot machines at both Twin River Lincoln Park and Newport Grand, allow overnight gambling at both seven days a week and raise the legal gambling age from 18 to 21. Overnight gambling is allowed now only on weekends and holiday eves. With these limitations, “we are impeding their ability to thrive,’ said Rep. Lisa Baldelli-Hunt, D-Woonsocket. “If we were to allow them to operate 24/7 we would increase the revenue into our state, we would help them to survive and thrive instead if pulling back on the reins.’’

There were no votes on any of the bills, and there was little debate, though organizers for the restaurant workers union, UNITE Here Local 217, urged the lawmakers to include “specific wage standards” in any gambling expansion bill to ensure good-paying jobs. Renewable at five-year intervals, Twin River’s current revenue contract with the state requires it to have the equivalent of 1,300 full-time employees who earn at least 150 percent of the minimum wage if it seeks to renew the agreement next year.

kgregg@projo.com