R.I. governor unloads on proposed casino

Michael Mello

Friday, May 14, 2004 | 9:11 a.m.

PROVIDENCE, R.I. -- Framing the debate over a proposed casino as a fight for the "soul and the future of our state," Gov. Don Carcieri on Thursday asked a House panel to oppose a request to allow voters statewide to decide on the project.

Harrah's Entertainment Inc. wants to build a casino in West Warwick in partnership with the Narragansett Indian Tribe, but they need voters' approval. The Las Vegas-based casino operator on Wednesday proposed paying a $100 million licensing fee and offered a guarantee the state would not see a reduction in gaming revenue if a casino is built.

Carcieri told the Finance Committee a casino will hurt businesses around it and likely lead two existing gaming operations in the state to try to expand and become casinos.

"I am gravely concerned we are about to get on a path that will change the whole nature of what our state is about," he said.

The Republican governor said those proposing a casino are "people from outside who want to suck the lifeblood out of us. That's what gambling will do."

He said the state already has "a good deal" with the Lincoln Park track and Newport Grand gaming venue, which operate video lottery terminals. Those two businesses next year are expected to generate $250 million in tax revenue for the state.

"We are deep enough in it already," Carcieri said of gambling.

"I really ask you, stop this thing now," he said. "Please don't open Pandora's box, because we are heading for trouble."

Finance Chairman Steven Costantino, D-Providence, told Carcieri the issue for many lawmakers is determining whether voters deserve the chance to decide on a casino.

"If they vote it down that way, at least it is the direction of the people," he said.

Carcieri said lawmakers and the governor are elected to make such decisions, rather than leave them to voters.

He said that if the committee does approve putting the question on the November ballot, it should make sure it is detailed, and includes the tax rate.

Even if the committee followed that advice, however, Carcieri said he would likely veto any bill to put the question on the ballot.

Carcieri has proposed requiring any casino to make the same percentage tax payments to the state as do Lincoln Park and Newport Grand, which have video-lottery gaming.

The proposed 25 to 35 percent tax rate for the casino is well below the 60 percent rate paid by Lincoln Park and Newport Grand.

Harrah's has sought to allay concern about any negative effects a casino could have Lincoln and Newport Grand by promising to make up for any drop in overall gaming revenue paid to the state after its casino opened.

But Carcieri said lawmakers would have difficulty approving a lower tax rate for a casino and the two existing operations.

"How can we stand here today and say we'll see a new casino come in and not allow the two (businesses) that have been here for 11 years to compete?" he asked.

Wembley PLC, the London-based owner of Lincoln Park, issued a statement Thursday urging lawmakers to come up with a compromise tax rate that would be applied to all gambling facilities in the state.

The House panel was not expected to vote on any bills.

Rep. John Shanley, D-South Kingstown, told Carcieri that if "it isn't a casino, it's got to be something.

"We need someone to step up and tell us where we are going to go" to create new jobs and increase tax revenue, he said.

Carcieri said casinos don't create economic development.

"Our future is in our brainpower, the beauty of our state and our integrity," he said.