Lawmakers ask Harrah’s to raise ante on proposal

Michael Mello

Tuesday, June 8, 2004 | 11:26 a.m.

PROVIDENCE, R.I. -- House leaders last week told Harrah's Entertainment they want a better financial deal for the state before voting on a proposal to build a casino in West Warwick.

Harrah's has offered to pay a $100 million licensing fee over 10 years and a gambling tax of between 25 percent and 35 percent, in exchange for the right to build the resort-style casino with the Narragansett Indian tribe.

House Speaker William Murphy, D-West Warwick, said he asked for a meeting with Harrah's President Gary Loveman and other company officials "to get a better deal for the state."

Harrah's representatives met separately at the Statehouse with House and Senate leaders, but did not make a new offer, according to House Finance Chairman Steven Costantino, D-Providence.

Murphy, however, said company officials seemed willing to negotiate.

"The meeting went well, we'll be here to meet again in the next few days, and we anticipate" an improved offer, he said.

Costantino said he told Harrah's officials he wants a higher tax rate. He'd also like either a higher licensing fee or faster payment of it.

Murphy said the company wasn't told its current proposal would be turned down, but he said it was made clear that House leaders believe the state deserves more.

Senate President Joseph Montalbano, D-North Providence, and members of his leadership team also met with Harrah's officials after learning of the meeting with House leaders. Senate leadership spokesman Greg Pare couldn't say whether the senators asked Harrah's for a better deal.

Harrah's, based in Las Vegas, has proposed a $600 million project. Lawmakers must first agree to put the question on the November ballot, and voters would need to approve it.

The company says a casino would create more than 3,200 jobs and generate $150 million in state and local taxes in its first year of operation.

Gambling halls in Lincoln and Newport pay about 60 percent of their profit from video lottery terminals to the state. Both Lincoln Park and Newport Grand have asked lawmakers for the same tax rate as a proposed casino would get.

Narragansett Chief Sachem Matthew Thomas didn't know Harrah's was meeting with state lawmakers, but said he supports the company's efforts. The tribe would get a share of the casino's profit under an agreement with Harrah's, which would own the casino.

"They are doing their job," Thomas said of Harrah's. "We just hope for the best."