PROVIDENCE -- There are a few things the folks at the Boyd Gaming Corp. think you need to know about Harrah's Entertainment.
And the feeling is mutual.
So much so, that anyone listening closely at the Rhode Island State House this week would have heard tales of alleged misdeeds and broken promises in other states where the two Las Vegas casino titans do business.
Boyd brought to light the "ultimatum" that Harrah's gave Louisiana officials last year: cut in half the $100-million minimum tax expected from the twice-bankrupt Harrah's New Orleans Casino or the casino closes permanently, taking 2,800 jobs with it.
When asked about this episode by The Providence Journal, Harrah's lawyer David Satz explained the renegotiated tax deal this way:
"'The Louisiana story is a story about us keeping our commitments. We hung in there. We didn't let our employees go. We hung in and fought and ultimately got a structure that worked for everybody."
But right after Boyd President Donald Snyder mentioned Harrah's New Orleans problem during a casino hearing at the State House last Tuesday, Harrah's lobbyists responded in kind.
They brought to light the $1-million settlement the Indiana Gaming Commission ordered Boyd to pay, in September 2000, for failing to disclose a "consulting agreement" with a lobbyist in a neighboring state.
The agreement called for Kevin Flynn, one of the former owners of Boyd's Blue Chip Casino, in Michigan City, Ind., to lobby against two Indian tribes' efforts to open competing casinos in Michigan, according to the Grand Rapids Press, the Chicago Sun Times and the South Bend Tribune.
When asked about this imbroglio yesterday, Snyder acknowledged an agreement to pay Flynn an extra $5 million. He said the payment was "contingent on there not being a competitive operation" across the border, in Michigan, when Boyd's contract with Flynn expires in 2004.
But Snyder said the Jan. 1, 2000, arrangement needs to be viewed as what it was: an outgrowth of Boyd's negotiations to purchase the Blue Chip in 1999.
"You had him on one side saying you should pay me 'x amount,' and we're saying, 'But look, there's likely to be competition . . . Put your money where your mouth is. If these aren't approved tribes, if there isn't a valid contract in place, if there isn't land in trust and there is not going to be competition, fine, we'll pay you more money.' "
"We will never fight any valid competition," Snyder said.
Against this messy backdrop, lawyers and lobbyists for the two Las Vegas casino companies came to the State House on Tuesday to try to win the hearts and minds of Rhode Island lawmakers.
Boyd has a proposal for a $500-million casino in Rhode Island, land options on a proposed site in a West Warwick industrial park, and a partner: the Narragansett Indians.
Harrah's has no site or proposal. But it does have a script it believes Rhode Island should follow in choosing the operator of its first "state-franchised" casino.
The issue that brought both companies to Rhode Island: a hearing on House Finance Committee Chairman Gordon Fox's legislation to create a commission to spend up to a year studying "the desirability of further gaming in Rhode Island," rather than voting now on the Narragansetts' bid for a ballot question in November
The lawyers argued law.
Chief Sachem Matthew Thomas argued fairness: "Is it fair to the Narragansett Indian Tribe for the rules to be continually changed? Is it fair to the townspeople and . . . businesses of West Warwick to be denied the opportunity to move from the ranks of economically distressed communities, especially after they have done everything demanded of them by the law?"
In the end, the House Finance Committee voted 16 to 1 for the study. The full House is expected to vote Thursday. But the hours-long debate has already triggered side effects.
It gave Fox another argument to support his controversial call for the "in-depth study" that the Narragansetts have denounced as a delaying tactic.
When two of the giants in the casino industry "start throwing allegations and castigations at one another, I think that truly suggests you need to have not only a study, but a very thorough study . . . and you don't want to rush to judgment on any of this stuff," Fox said yesterday.
"It is just not waving millions of dollars in front of a depressed community that should be the standard to let someone come in to do business with us," he said.
The debate also drew attention to all of the questions Rhode Island's gambling-expansion law leaves unanswered.
Among them are the questions that members of a Providence gaming-study commission asked in 1998 when the Narragansetts were eyeing a casino site on the Providence-Cranston waterfront:
What if Rhode Islanders said yes, in November, to allowing unnamed parties to open a "gambling facility" at an unspecified location in Providence, West Warwick or any other broadly stated location? What happens next?
What if other developers, who have not yet shown their faces, are waiting in the wings with competing casino plans for the same community?
What guarantee does Providence, West Warwick, or any other city or town have that it will get any significant portion of the gambling revenue from a casino?
Lawyers and lobbyists for Boyd, the Narragansetts and the Town of West Warwick urged the legislators to look at what Rhode Island law says.
Harrah's chief financial officer, Chuck Atwood, urged them to look at all the law doesn't say.
Both sides based their arguments on the voter-approval law (RIGL 41-9-4) that has been on the books, in one form or another, for more than two decades. In 1994, voters shored it up with an amendment to the state Constitution so legislators could never again waive the law, as they did when they brought Video Poker to Rhode Island without voter approval.
There were five casino proposals on the state ballot that year: all failed. The voter-approval amendment to the Constitution passed by a vote of 207,949 to 98,574.
The 1994 amendment says: "No act expanding the types of gambling which are permitted within the state or within any city or town . . . shall take effect until it has been approved by the majority of those electors voting in a statewide referendum and by the majority of those electors voting in a referendum in the municipality in which the proposed gambling would be allowed."
The companion state law specifies the wording of the question that can be placed on the ballot, at the request of the town or city council in the affected community: "Shall a gambling facility and/or activity be established in the town (or city) of . . .?"
With the West Warwick Town Council on the verge of seeking, for the second time, a referendum on the Narragansetts' casino proposal, the lawyers representing Boyd, the tribe and West Warwick -- William Dolan, Jack Killoy and William Poore -- made this argument:
"In the face of this constitutional change, the General Assembly has no legal choice other than to let the people's voice be heard on the resolution adopted by the Town of West Warwick."
In the position paper they gave the lawmakers, they also characterized as unconstitutional "the deft sleight of hand" by which the General Assembly in 1998 "attempted to retrieve the power" voters had seized in 1994 when they made the voter-approval requirement part of the state Constitution.
Referring to the legislature's 1998 move to give itself final say over what makes it to the ballot, the lawyers argued: "The only question to be decided by the General Assembly when presented with a resolution is this: Whether a referendum should be allowed.
"The Act does not authorize the General Assembly to approve, modify, reject or even 'study' the propriety or wisdom of a specific casino prospect . . . Nor does the Act create, as others have suggested, a competitive bidding process where casino operators, other than those partnered with the municipality presenting the proposed resolution, may be heard and invited to participate."
Atwood, Harrah's CFO, had a simpler argument: a vote for the gambling study would be a vote for "openness, competitiveness and public regulatory scrutiny."
Of "the muck" that Boyd and Harrah's -- which are partners in a Tunica, Miss., golf course -- flung at each other, Fox said: "If just talking about it is bringing this stuff out, imagine what we will find out."
