Rhode Island news
State proposes deal on ‘virtual blackjack’ machines
01:00 AM EDT on Tuesday, August 28, 2007
PROVIDENCE — With the threat of casino gambling looming in Massachusetts, there is a move to bring “virtual blackjack” to Twin River, possibly as early as next month.
Lottery Director Gerald Aubin confirmed yesterday that he has asked GTECH and a second vendor, International Game Technology (IGT), whether they are interested in supplying an initial 18 machines that simulate a live blackjack game by allowing five or six players to sit at a table, signaling their moves — hit me again, double-down, split — electronically to a “dealer” on a video screen.
In a promotional photograph supplied by one of the leading manufacturers of the machines, a buxom blonde in a revealing Oktoberfest outfit “deals” cards from the video screen. The “recommended” minimum denomination for a bet: $5.
In interviews yesterday, both Aubin and state Rep. William San Bento, the chairman of the legislature’s Lottery oversight committee, said they believe, and have been assured by legal advisers, that voter approval is not required because the machines do not, in their view, constitute the introduction of a new form of gambling in Rhode Island.
“If you look at the components and the definition” of a video-lottery terminal, Aubin said, the new multiplayer games familiar at many commercial casinos and introduced by the Delaware Lottery last year are “absolutely nothing different than what we have.”
Governor Carcieri agrees. Though he was an avowed opponent of the Harrah’s-sponsored Narragansett Indian casino proposal on last year’s state ballot, spokesman Jeff Neal said: “The governor is aware of the Lottery division’s plan and does not object. Based on the information the governor has been given, these virtual table games are no different in substance from a video-lottery terminal. As a result they are perfectly allowable under current statute.”
Asked what distinction Carcieri makes between the West Warwick casino proposal, which he opposed, and the introduction of multiplayer table games at Twin River, Neal said it is “correct to say the governor opposed a Harrah’s casino in which the vast majority of the profits would have gone to an out-of-state gambling company. That is very different from his position toward Rhode Island’s two longtime gambling facilities, both of which are operated for the benefit of the citizens of Rhode Island.”
Both Twin River — formerly Lincoln Park —and the state’s only other slot parlor, Newport Grand, are privately owned. Two of the member companies in BLB, the consortium that owns Twin River, were original developers of the Mohegan Sun casino: the Waterford Group and Kerzner International. But unlike the defeated Harrah’s proposal, Neal said “the vast majority of their proceeds go to the citizens of Rhode Island.”
Aubin said the Lottery has not yet analyzed how much more money the new virtual machines might raise for the state, which already counts heavily on video gambling to finance state government: a projected $271.1 million this year alone.
But Delaware’s receipts from its Lottery-sponsored gambling activities at three horse tracks shot from $601.7 million in fiscal 2006 to $632.2 million this past year, according to Delaware Lottery Director Wayne Lemons, after the approval of more slots; a total of 54 virtual table games with five playing positions each for blackjack and other traditional casino fare, such as poker and baccarat; and 24-hour operations.
Lemons said it is hard to pinpoint how much of the revenue surge was attributable to the introduction of the virtual games, which produce an average of $200 a day per seat. (At that rate, the 270 machines — which first arrived at Delaware’s tracks in October 2006 — would produce a potential $19.7 million over the course of a full year.)
Lemons said the “games are very popular” and ‘they seem to attract a younger clientele. I am not talking about teenagers … people in their late 20s, early 30s seem to be more attracted to these types of machines than they are regular slot machines.”
TWIN RIVER’S OWNERS appear to have led the drive. The owners of Newport Grand, which just last week broke ground on a long-stalled expansion, have not asked permission to install any of the virtual machines, but spokeswoman Amy Kemp said they are “interested.” Officials at Twin River never responded to inquiries about the machines.
At this point, however, Aubin said neither GTECH nor IGT — which has a financial stake in one of the two leading companies selling the machines, DigiDeal — has committed to buying the new virtual-game machines — which, he said, are considerably more expensive than a traditional video-slot terminal, which costs $8,000 to $10,000.
Why not? Aubin said the companies need to determine whether the 7-percent return that state law allows them from any machine they place at Twin River would be enough to justify buying and leasing to the state machines that can individually cost as much as $100,000.
GTECH spokesman Robert Vincent said: “We are looking at it,” but “it’s a different business model and we are trying to figure out if it works … if, at that rate, these machines work.”
Aubin was unable to pinpoint the date he decided to offer the Lottery’s three video-game suppliers “an opportunity” to place virtual blackjack machines at Twin River.
He said the decision “evolved” over several months after Twin River “asked for them last spring,” and included a May 21 discussion with the Lottery Oversight Commission the legislature created after voter passage of a separation-of-powers amendment to the state Constitution forced the dismantling of the legislator-dominated Lottery Commission. (Now decisions such as this that would before have required a public vote take place unannounced in private state offices.)
He said he never asked for a formal legal opinion on whether voter approval was required in light of a provision in the state Constitution requiring referendums on the introduction of any new “types” of gambling. More specifically, Article 6, section 22 says: “No act expanding the types of gambling within the state or within any city or town … shall take place until it has been approved by the majority of those electors voting in a statewide referendum and by the majority … voting in a referendum in the municipality in which the proposed gambling would be allowed.”
San Bento yesterday said he asked — and received — a reassuring legal opinion from the legislature’s law office, and Aubin said: “I would not do anything I thought was in violation of any policy or regulation … or law. I truly believe it’s a video terminal. It just has the added feature of a virtual person.”
AFTER LOOKING at the promotional literature for the virtual games, the unidentified state lawyer who wrote the opinion for San Bento questioned whether the machines dispense coins, cash or tokens, which would take them out of the realm of VLTs. Even if this were not so, “there is an issue of whether the interaction of the player with the game removes it from the definition of a VLT. Put another way, does the fact that a player may control some of their wager and otherwise interact with the game make it more a game of skill than one of chance?”
In the end, he concluded: “While it is a different ‘game’ than the games currently at Twin River, it is a game that (at least on first impression) meets the definition of a Video Lottery Game played on a Video Lottery Terminal. As such, a reasonable interpretation of the game would be that it is NOT a different type of gambling, only a different game.”
Said San Bento, D-Pawtucket, yesterday: “Gerry and I have been talking about this on and off for about three months. My fear has been that with this Massachusetts casino, we can’t afford to lose the revenue.” He was referring to the proposal to open an Indian casino in Middleboro, Mass. “We are going to have to make Lincoln and Newport full casinos eventually. There might be a move for that coming up … also a need to open up Lincoln and Newport 24 hours so we can compete.”
But, “I think [this] will keep us competitive for a while. I think it will bring more people to Lincoln., not for a great length of time. It’s not the same as playing real blackjack, but it will keep us competitive … and I don’t think we need to go out for a vote because, number one, it’s all computer driven — no people handling cards or money.”
A second member of the oversight commission, Sen. Maryellen Goodwin, D-Providence, agreed on all counts. “I remember being fascinated by how realistic it was,” she said. “If you’ve been there now, with the exception of having gaming table, the blackjack table and roulette wheel, they — especially Lincoln — are essentially a full-blown casino, a mini-scale of what you would find in Las Vegas.”
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