NEWPORT — Newport Grand yesterday celebrated the completion of a $28-million renovation that transformed its former jai alai fronton into additional space for more video-slot machines, new virtual blackjack tables and expanded food and beverage service.

The yearlong refurbishment virtually erased any sign of the seven-story, three-walled jai alai court and its 3,000-seat auditorium, which lost out to video gambling over the years and ended in 2003.

The cavernous, 22,000-square-foot fronton was divided into three floors, including one with 500 additional video slots and six virtual blackjack tables, where up to five players can sit at a table and play an electronic version of the casino game.

The additional space allowed Newport Grand to increase its number of video slots to 1,500. But the project, which was originally targeted for completion at the end of 2006, took two years longer than expected. Its debut comes as the nation faces some of its most dire economic troubles in years.

Diane Hurley, co-owner and CEO of Newport Grand, acknowledged the difficulties posed by the economy but remained positive about the future of the business, even as the bond rating for Twin River — the other video-slot parlor regulated by the state — dropped and speculation grew that the Lincoln facility is headed into bankruptcy.

“It’s difficult to speculate on our future revenues due to the current challenges in the economy. With the opening of our new gaming area, we feel people will find new experiences when visiting Newport Grand, especially with the introduction of virtual blackjack,” she said in a statement responding to a reporter’s query.

“There is no question that the economy and rising gas prices have people worried about spending. At Newport Grand, our customer counts are steady and actually trend up, but people are spending less. With the opening of the new gaming space and as consumer confidence returns, we are poised to see an increase in play and revenue.”

From 2000 to 2005, video-slot revenues at Newport Grand grew every year, from $36.8 million to $79.4 million. But they have declined steadily ever since, falling to $71.1 million for fiscal 2008, which ended in June. And the first two months of this year are well below last year.

In 2005, the General Assembly and Governor Carcieri approved an agreement that permitted Newport Grand to increase its betting machines to 2,101, froze the tax rate it pays on video-gambling revenues for 10 years and required the owners of the business to undertake $20 million in improvements.

The improvements spelled out then, and which were part of the just-completed project, include new security and surveillance offices, cash handling, food and beverage storage and more conveniently located loading areas. The project also relocated and upgraded the simulcast area, where wagers may be placed on thoroughbred, harness, and greyhound racetracks across the country, as well as jai alai in Florida. Also new to the facility are a 72-seat express café and a 28-seat cocktail lounge.

Yesterday’s celebration included the following speakers: Hurley, Newport Grand general manager Joe Moore, Keith Stokes, executive director of the Newport County Chamber of Commerce, and Evan Smith, chief executive officer of the Newport Convention and Visitors Bureau.

rsalit@projo.com