With big business often comes great political interest, especially when it concerns a $1 billion no-bid deal between a for-profit business entity and a state government.
Such is the case in Rhode Island right now, where International Game Technology’s 20-year extension of its no-bid Rhode Island lottery contract has come under heavy scrutiny from Twin River Worldwide Holdings and its preferred partner Scientific Games Corporation.
The two companies have ramped up political pressure in recent months to encourage Gov. Gina Raimondo to allow for an open bidding process.
While Raimondo has already signed an extension with International Gaming Technology (IGT), the deal remains subject to a legislative review process that won’t commence until September.
Twin River Worldwide Holdings, which owns state-run casinos in Rhode Island, started things in July with an aggressive media campaign featuring a full-page advertisement in the Providence Journal.
That advertisement asserted the state’s deal with IGT would ultimately cost Rhode Island taxpayers millions of dollars in lost revenue.
Now Scientific Games has entered the arena, meeting with state representatives this week (according to the Journal) to encourage lawmakers to open Rhode Island’s lottery up to a bidding process in which the company might have a chance to become the state’s provider of lottery equipment.
The connection between Twin River and Scientific Games is that the companies have engaged in formal discussions about working together in Rhode Island, but can’t do so because the state’s current contract with IGT prohibits it.
According to WJAR, Providence's NBC affiliate, Raimondo believes the IGT contract guarantees around 1,100 jobs in the state for the company’s North American operations as well as more jobs within the company to support other global contracts.
Moreover, IGT has gone so far as to hint that the company might not keep its headquarters in Rhode Island should its existing contract with the state not be extended.
The crux of the issue facing Raimondo and lawmakers is whether the amount of jobs IGT provides Rhode Islanders is worth what the state might be paying over the free market price of IGT’s provided services.
One side believes the economic impact of the IGT contract is net positive for the state while the other sees it as a loss.
While Raimondo believes the amount of jobs the company provides in the state is worth not haggling over the price of the contract, opponents argue that the price is too steep for taxpayers to ignore.
They also assert that there’s enough data to suggest that getting bids from other companies, such as Scientific Games specifically, would be the better option.
To complicate matters, AP reported that IGT donated $150,000 to a group that Raimondo currently chairs, the Democratic Governors Association.
That has led some to believe the governor might not simply have the best interest of the state in mind in her support of extending the IGT contract without other service bids.