Casino

Each day this week, The Providence Journal will pose and answer questions about the proposed West Warwick casino. Readers are invited to submit their own questions at projo.com. We will select representative questions to answer in The Sunday Journal. Past questions can also be viewed online.

Q: How much money would the Narragansett Indian tribe get from the casino?

A: The tribe would get 5 percent of gambling revenues, after taxes are deducted, in the first few years. If revenues at the casino rise, the tribe’s share would climb to 6 percent. In the first year, that would mean $16.8 million for the tribe, $18.8 million in the second year and $20.8 million in the third year. The casino would also give the tribe at least $75,000 a year for a health fund and another $75,000 a year for an education fund.

Q: How much does Harrah’s stand to make from the deal?

A: After taxes, the tribe’s share and operating expenses are deducted, Harrah’s would make $24.5 million in the first year, $25.3 million in the second year and $24.6 million in the third year.

Q: What about the Town of West Warwick?

A: Under an agreement with the town, Harrah’s would pay at least $11.5 million a year in annual property taxes under a property-tax freeze agreement. The town would also get an increasingly larger take of the gambling revenue — a half percent in the first year to 2 percent in the 11th and later years. By the third year of casino operations, that payment would be about $4 million. Harrah’s would also make one-time payments of $5.3 million to the town in the first two years and make annual payments for additional police and fire personnel.

Q: Would the state lose any money from Lincoln Park and Newport Grand if Harrah’s opens its casino?

A: Casino supporters and opponents all agree that competition from Harrah’s would cause business to drop at the two slot halls. Harrah’s says the impact will be minor and that both facilities would recover after a few years. Both facilities predict a 40-percent drop in revenue. A 2004 report by gambling analyst Sebastian Sinclair, prepared for the Town of West Warwick, forecast a 12.5-percent decline at Lincoln Park and a 33.6-percent decline at Newport Grand.

Q: So would the state lose money?

A: That depends on how much business Lincoln Park and Newport Grand lose. Harrah’s says the new tax revenue it brings in would more than offset any losses at the existing facilities. Casino opponents note that because of the differing tax rates, for every $1 not gambled at Lincoln and Newport, $2.40 would have to be gambled at Harrah’s to make the state whole.

Q: What are slippage payments?

A: Last year, lawmakers promised Lincoln Park and Newport Grand that taxpayers would pay for any losses the two facilities incurred as a result of a casino. Casino opponents say that these payments would add to the potential state budget problems.

Q: Would Harrah’s cover any of those losses?

A: Harrah’s has said in the past that it would make up the state’s losses at Lincoln Park and Newport Grand in the first two years. But Harrah’s is not willing to pay for the slippage payments to the private owners of Lincoln Park and Newport Grand.