Casino

PROVIDENCE — With gambling promoters dangling the promise of tens of millions of new state dollars before their eyes, lawmakers yesterday turned their attention to professional sports-betting and round-the-clock gambling at Twin River and Newport Grand as possible ways to plug the state’s massive deficit.

No votes were taken. But at a Senate committee hearing yesterday, lobbyists and executives from the state’s two video-slot parlors pitched 24-hour gambling on weekends and the nights before state and federal holidays as an opportunity to raise upwards of $14.8 million annually in new state revenue.

Twin River also sought permission to offer its customers the same kinds of “promotional credits” — or “free play time” — available to frequent players at full-scale casinos, amid assurances the offer “will provide a compelling reason” for gamblers here and from out-of-state who are now driving through Rhode Island to stay.

Should the state’s share drop as a result of this promotional giveaway of potential state revenue, the bill introduced by Sen. Paul Moura, D-East Providence, is written in such a way that a Twin River executive told the lawmakers the state would be “held harmless.”

But Sen. Marc Cote, D-Woonsocket, suggested the moves would provide one more impetus for Massachusetts to open its doors to full-scale casino gambling. “I believe we should be very careful in creating an incentive for Massachusetts to feel that they have to get into the gambling business,” he told colleagues on the Senate Committee on Constitutional and Regulatory Issues.

Former Rep. Rodney Driver said “the state doesn’t urge people to buy more liquor or cigarettes — even though the state gets revenue from the sales,” and it should acknowledge gambling can take as high a “human and societal” toll.

But Sen. Stephen Alves, D-West Warwick, said: “Gambling is here in this state and it’s here to stay and when we say we shouldn’t build a budget upon it, well, we already have. We’re knee deep in all of it. We have to be realistic.”

“I mean people are going to gamble and there are people that like to gamble throughout the night on the weekends. That’s what they like to do. People like to go 11 to 7 because there’s less people there,” he said. As for the owners of Twin River especially, “they’ve spent millions of dollars. They’ve made it a first-class facility and if Massachusetts does build, what we need to do is give them the tools to compete with them.”

Meanwhile, Senate Majority Whip Dominick Ruggerio dangled the potential for “$500 million” in new state revenue as an argument for legalizing professional sports-betting, while acknowledging his revenue estimate is, at this point, only an “educated guess” based on the amount wagered in Las Vegas on the Super Bowl; and the fact that any such move would require approval from Congress, even if voters here said OK.

Federal law restricts legalized sports betting to four states — Delaware, Montana, Nevada and Oregon. Only Nevada enables betting on professional and college games.

Ruggerio said gamblers already have online access to offshore betting, but Rhode Island derives no benefit from it and “it’s basically uncontrolled so I think by putting something forward such as this could provide some additional revenue to the state.” His game plan: “I think the first thing would probably be to get the bill to move…and then we would go to Congress and ask permission.”

While Ruggerio, D-Providence, acknowledged that variations of his proposal have been introduced many times since the early 1980s, the magnitude of the state’s financial problems has provided what some hope and others fear will be a window of opportunity for the gambling industry to persuade previously reluctant lawmakers to allow more gambling.

The state’s reliance on money wagered and lost at Twin River and Newport Grand is already huge. The state Lottery projects $290 million for the state this year from the acres of video-gambling machines at the two facilities; $303 million next year.

But the gambling market across the region has softened.

Slot machine revenues are off by more than 6 percent at Connecticut’s casinos, Foxwoods and Mohegan Sun, in the five months ending Jan. 31, compared to a year ago. For Mohegan Sun, the downturn is its first after more than a decade of steady growth, according to a report in The Boston Globe yesterday that attributed the slide, in part, to a faltering economy that has affected the casino industry nationwide, but also to signs the region’s casinos are exhausting the supply of new gamblers.

Revenue here is up. But the earnings per machine have dropped in the last three months, leading Twin River’s owners to impose new cost-cutting measures, including shutting down two restaurants for all but weekends.

After spending a reported $225 million on renovations, the owners of Twin River have also run into some problems with their lenders.

UTGR Inc., the company which owns Twin River, missed one of its loan payments to lenders, which was due last week. Separately, the Standard & Poor’s Corp. last week downgraded the ratings it assigns to UTGR’s debt.

Overall revenue at Twin River is up sharply, but S&P said it is concerned about UTGR’s ability, after paying expenses, to fully cover the interest and principal payments on its loans.

None of the lawmakers questioned the three Twin River executives who appeared before them yesterday about this. And when asked later whether Twin River was unable to make the payment — or positioning itself to negotiate betters terms with its lenders, both Craig Sculos, the vice president and general manager of Twin River, and chief financial officer Jay Minas declined comment. Spokeswoman Patty Doyle would only say: “Twin River needs this 10-day period to work out short-term cash flow issues with its lenders.”

Meanwhile, Lincoln Town Councilman Keith E. Macksoud reminded the lawmakers yesterday that 65 percent of the voters in his community soundly rejected 24-hour gambling during a nonbinding referendum last November. But “being a realist, I am also aware of the financial problems that our state is facing, and I understand that there is a need to increase non-tax revenues.”

If 24-hour gambling is inevitable, he urged the lawmakers to try it on a test-basis for three to six months to gauge the impact on both “the budget and the host community,” and also to give the town a share of the overnight play: at the very least, the same 1.25 percent it averages now during regular hours of operation, but preferably 3 percent.

kgregg@projo.com